Hero MotoCorp Ltd. is a dominant force in the global two-wheeler market, distinguished by its remarkable achievement of being the world's largest motorcycle and scooter manufacturer for 25 consecutive years. This long-standing leadership is built on a foundation of deep-seated trust and unmatched relationships across its entire value chain, including dealers, suppliers, and partners—a competitive advantage that is difficult for others to replicate. The company commands the largest "park size" in the industry, meaning it has the highest number of vehicles on Indian roads, which provides a substantial and ongoing opportunity in the parts and accessories business. While deeply rooted in its legacy and volume leadership, particularly in the entry and deluxe motorcycle segments, Hero MotoCorp is also demonstrating strategic agility. It is actively making bold investments in future growth areas, as seen with its positions in associate companies like Ather and Euler Motors, signaling a clear intent to lead in the evolving mobility landscape. The current leadership is acutely focused on expanding its presence in high-growth categories where it is currently underrepresented, such as scooters, premium motorcycles, and the electric vehicle (EV) space, alongside a concerted push into global markets. This strategic pivot aims to leverage its established strengths to capture new avenues for significant market share expansion and sustained growth.

Official Website: http://www.heromotocorp.com/

• Q3 FY'26 Performance:

• The company achieved its highest-ever quarterly revenue of INR 12,328 crores, a year-on-year (YoY) growth of 21%.

• EBITDA stood at INR 1,810 crores, reflecting a 23% YoY growth.

• Reported Profit After Tax (PAT) was INR 1,349 crores, a 12% YoY increase.

• Normalized PAT, excluding exceptional items, was INR 1,489 crores, a 20% YoY growth.

• An exceptional item provision of INR 119 crores was made in cognizance of the new labour code.

• 9-Months (9M) FY'26 Performance:

• Revenue for the 9-month period amounted to INR 34,034 crores, a 10% YoY growth.

• EBITDA for the period was INR 5,015 crores, up 13% YoY.

• PAT stood at INR 3,867 crores, a 10% YoY growth.

• Key Metrics & Cash Flow:

• The Average Selling Price (ASP) increased by 4.2% YoY and 1.3% quarter-on-quarter.

• The Parts, Accessories, and Merchandise (PAM) business recorded its highest-ever quarterly revenue at INR 1,673 crores, growing 8% YoY.

• Strong cash management resulted in operating cash generation of INR 7,045 crores in the first 9 months of FY'26.

The company delivered a record-breaking quarterly revenue performance, supported by robust growth in both profit and operating cash flow, demonstrating strong financial health and operational efficiency.

• Unmatched Value Chain Relationships: The company's leadership highlights an unparalleled level of trust and deep-rooted relationships with its dealers, suppliers, and partners. This ecosystem, built over decades, is considered a core strength and a significant competitive moat that is very difficult for competitors to replicate.

• Largest Vehicle Park: Having been the market leader for over two decades, Hero MotoCorp has the largest number of its vehicles currently on the road. This massive installed base presents a unique and substantial opportunity for growth in the high-margin parts, accessories, and after-sales service business.

• Proven Strategic Agility: The company has demonstrated its ability to make bold strategic moves to adapt to market shifts, exemplified by its early investments in associate EV companies like Ather and Euler Motors. This foresight positions it well to navigate and capitalize on industry transitions.

Hero MotoCorp's unique advantages lie in its deeply entrenched partner ecosystem and the industry's largest installed vehicle base, which together create a strong defensive moat and a significant, profitable growth avenue.

• Macroeconomic Environment: The Indian economy is identified as a "bright spot" globally, with the RBI projecting GDP growth at 7.3% for FY'26. This growth is supported by government initiatives and lower inflation, creating a favorable backdrop for consumption. The economic survey projects GDP growth near 7% for FY'27.

• Industry Catalyst: The two-wheeler industry has witnessed a significant rise in volumes following a GST rate reduction in September 2025. This has unlocked demand across both urban and rural markets.

• Current Demand Trends: Post-festive demand remains strong, with January 2026 retail sales growing at 21% YoY. This trend is broad-based, with growth observed across all product segments and geographies.

• Future Outlook:

• Management expects the two-wheeler industry to grow by double digits in the fourth quarter of FY'26.

• For the full financial year FY'27, the industry is projected to grow in the high single digits, with some moderation expected in the second half due to a high base effect from the current year.

The two-wheeler industry is experiencing a robust, demand-led recovery, spurred by favorable economic conditions and policy support, with a positive growth outlook for the upcoming year.

• Five Key Growth Pillars: Management has identified five strategic pillars for accelerated growth and market share expansion:

1. Scooters (ICE & EV)

2. Premium Motorcycles

3. Global Markets

4. Electric Vehicles (EV)

5. Parts & Accessories Business

• Segment Performance:

• Global Business: Volumes grew by an impressive 41% YoY, with market share increasing by 100 basis points to 7.5%. The premium portfolio now constitutes 40% of total global volumes.

• Entry Segment (100cc): The company marked its fourth consecutive quarter of market share expansion, led by the HF Deluxe Pro. In the deluxe 100cc category, Splendor helped achieve a market share of 91%, the highest since FY'18.

• Deluxe Segment (125cc): Market share is gaining, driven by the Glamour X and the new Xtreme 125R. The Glamour portfolio's market share is at an 8-quarter high.

• ICE Scooters: Market share has increased to nearly 7%, with new launches in the Destini and Xoom portfolios contributing to over 50% of scooter volumes.

• EV Portfolio (VIDA): Market share expanded by 6% YoY to 10.8% in Q3 FY'26. The company is now a top-two player in 37 towns.

• Parts & Accessories: The business reported its highest-ever quarterly revenue of INR 1,673 crores, growing 8% YoY.

• Company Growth vs. Industry: Management stated an expectation to grow ahead of the industry, supported by new product launches and investments in brand building.

The company is executing a clear strategy focused on five key pillars, which is already yielding market share gains and strong volume growth across its domestic and international businesses.

• Underrepresented High-Growth Categories: The leadership team explicitly acknowledges a significant headroom for growth and market share expansion in categories where the company is relatively underrepresented but which are growing faster than the overall market. These include scooters, premium motorcycles, and EVs.

• Global Market Expansion: Despite recent rapid growth (41% YoY volume increase), there remains a substantial opportunity in global markets. The company is actively expanding into new countries in Latin America and Africa, has recently introduced products in Europe, and is establishing a presence in the Philippines.

• Parts & Accessories Monetization: With the largest fleet of vehicles on the road, there is a massive, high-margin opportunity in the parts and accessories business. While growing at a healthy 8%, management sees a much larger potential for this profit-accretive segment.

• Scooter Segment Momentum: Macro trends such as urbanization, increasing participation of women in the workforce, and the growth of the gig economy are all favorable for scooter expansion. This provides a tailwind for the company to significantly grow its market share from the current 7%.

Hero MotoCorp has clearly identified significant growth opportunities in fast-growing product segments and international markets where it has a relatively low base, presenting a clear path for future expansion.

• Supply Chain Focus: A key focus for the new leadership is to ensure the company's supply chain is flexible, robust, and resilient to navigate future component crises or geopolitical issues.

• Capacity Enhancements: The strong demand for new models like the Xtreme 125R, which shares a platform with growing export models, has created supply bottlenecks. The management team is actively identifying model-specific capacity enhancements needed and is working to get them actioned quickly.

• EV Capacity Expansion: To meet the rising demand for its VIDA electric scooters, the company is planning for a marked increase in its EV production capacity in FY'27.

The company is actively managing its supply chain and planning targeted capacity expansions for both its ICE and EV portfolios to meet strong market demand for its new and existing products.

• Execution on Growth Pillars: The primary focus is on accelerating execution of the detailed action plans for the five growth pillars: scooters, premium, global business, EV, and parts & accessories.

• Supply Chain Fortification: The company plans to build a more agile and robust supply chain to mitigate risks from geopolitical issues and component shortages, ensuring production stability.

• Enhanced Customer Centricity: There will be a razor-sharp focus on improving the customer experience across all touchpoints, including pre-sales, post-sales, and the overall product experience. This includes scaling up premium retail formats like the 106 'Premia' stores.

• Team Engagement: Management emphasizes the importance of fostering an engaged and passionate team to drive the company's growth ambitions forward.

The company's future strategy is centered on aggressively executing its growth plans in key opportunity areas while strengthening its supply chain and elevating the customer experience.

• ICE Business Margin Expansion: The EBITDA margin for the core Internal Combustion Engine (ICE) business expanded by 100 basis points YoY to 17%. This improvement was driven by a combination of pricing actions, cost savings from the "LEAP" program, and operating leverage.

• Overall EBITDA Margin: The consolidated EBITDA margin for the quarter stood at 14.7%, an improvement of 20 basis points YoY. This figure includes an investment of approximately INR 208 crores in the EV business.

• Commodity Headwinds: The company is experiencing inflationary trends in commodities, particularly aluminum and precious metals, as well as forex impacts. The headwind from commodities in Q3 was approximately 40-50 basis points.

• Margin Mitigation Strategy: To counter cost pressures, the company relies on its cost-saving programs, improving product mix, operating leverage, and judicious price increases. A price hike of INR 300 per vehicle was taken in January 2026, and management is confident in taking further adequate price increases if required, given the strong market conditions.

Hero MotoCorp successfully expanded its core business margins through operational efficiencies and pricing power, and it remains confident in its ability to manage commodity headwinds to protect profitability going forward.

• Geopolitical and Economic Volatility: The broader operating environment is shaped by persistent geopolitical tensions, shifting trade policies across major economies, and the potential for supply chain disruptions. These external factors remain a key risk.

• Commodity Price Inflation: The company is facing inflationary pressure from rising prices of key commodities like aluminum and precious metals, as well as adverse foreign exchange movements. This poses a direct risk to input costs and margins if not effectively managed.

• Increased Losses at Hero FinCorp: The financing arm, Hero FinCorp, has seen increasing losses over the last three quarters. While management does not see this as a bottleneck for vehicle financing currently, continued financial stress at the subsidiary could pose a risk in the long term.

The primary risks facing the company are external, stemming from macroeconomic volatility and commodity price inflation, which could impact supply chains and profitability.

• Colombia Subsidiary Turnaround: The business in Colombia has seen a significant turnaround, with volumes growing over 200% in FY'26. Market share has nearly doubled from 5% to 9%, and the subsidiary has become profitable, reporting a PAT of $5 million in the first 9 months.

• Hero FinCorp Status: Hero FinCorp provides financing for approximately 25% of Hero MotoCorp's sales. Management has outlined that the entity has strong plans to improve its financial health by increasing its share of secured lending and bringing down credit costs, with an expectation to "get into the green" next year.

• ESG Recognition: Hero MotoCorp was recognized as an ESG leader among automobile companies by NSE Sustainability Rating and Analytics Limited, having mapped its initiatives against all 17 UN Sustainability Development Goals.

• PLI Scheme for EVs: One of the company's EV models has been approved under the government's Production-Linked Incentive (PLI) scheme. The team is actively working to build more models that meet the eligibility criteria for the scheme.

The company is seeing positive results from its international subsidiaries, has been recognized for its ESG leadership, and is actively leveraging government incentive programs for its EV business.