Hero MotoCorp: Growth, EV Plans, Global Expansion

Hero MotoCorp Limited continues to reinforce its dominant position as India’s leading two-wheeler manufacturer while also expanding its presence in the premium and electric vehicle segments. The company’s impressive sales volume, strategic global expansion, diversified product portfolio, financial performance, and proactive leadership transitions present a compelling growth story.

This detailed article will analyze Hero MotoCorp’s overall business performance, financial results, product portfolio, global expansion, EV segment leadership, and long-term outlook based on its recent fiscal year results and market developments.

Dominant Market Leadership

Hero MotoCorp remains the leader in the Indian two-wheeler industry with a commanding 29 percent share of the overall two-wheeler market and nearly 40 percent share in the motorcycle segment for FY25. Its wide distribution network of over 10,000 customer touchpoints globally offers significant brand accessibility.

The company operates eight manufacturing facilities globally, including units in India, Colombia, and Bangladesh, with additional assembly lines across Africa and Latin America. Its total installed capacity stands at an impressive 94.5 lakh units per annum.

Hero MotoCorp has also entered new markets such as Brazil and Southeast Asia, further broadening its international footprint. The company’s product development is supported by robust R&D centers located both in India and Germany, ensuring continued innovation across segments.

Diverse Product Portfolio

Hero MotoCorp strategically serves all key segments within the two-wheeler industry:

Entry & Deluxe Segment

HF Deluxe
HF 100
Splendor+
Splendor+ Xtec

Executive Segment

Passion Pro
Passion XTEC
Super Splendor
Super Splendor XTEC
Glamour XTEC
Glamour Canvas

Performance Segment

Xtreme 125R
Karizma XMR
Xtreme 200S 4V
Xpulse 200 4V
- Xtreme 160R
Mavrick 440
Xpulse 200 4V Rally Edition

Scooter Segment

Destini 125 XTEC
Destini Prime
Pleasure+ XTEC
XOOM

Electric Vehicle (EV) Segment

Vida V1 Pro
Vida V1 Plus

In Q2 FY25, Hero MotoCorp further refreshed its lineup by launching the new Glamour with enhanced features, Hero Xtreme 160R 2V 2024, limited-edition Mavrick 440 Thunderwheels, and the updated Hero Destini 125 scooter. These frequent launches maintain the company’s competitiveness across diverse customer segments.

Strategic Partnerships: Harley-Davidson & Zero Motorcycles

Hero MotoCorp has expanded its premium motorcycle offerings through strategic global collaborations:

In partnership with Harley-Davidson since October 2020, Hero MotoCorp exclusively manages sales and service of Harley-Davidson motorcycles in India. The company also handles Harley-Davidson parts, apparel, and accessories.
Hero MotoCorp joined hands with USA-based Zero Motorcycles to co-develop a premium electric motorcycle range, further boosting its position in the rapidly growing EV segment.

Global Sales Performance

Hero MotoCorp’s international business continues to strengthen, with contributions from key regions as follows:

LATAM: 49 percent of exports
Asia: 29 percent
Middle East: 16 percent
Africa: 5 percent

While India continues to contribute 96 percent of the company’s total sales, its international operations are scaling up as Hero MotoCorp capitalizes on emerging global markets.

Financial Performance Highlights

Sales Growth

For FY25, net sales rose 8.3 percent year-over-year to Rs 40,923 crore, supported by both volume and value growth. Domestic sales reached 56.1 lakh units compared to 54.2 lakh units in FY24. International sales improved to 2.9 lakh units versus 2 lakh units in the prior year.

Revenue from parts, accessories, and merchandise (PAM) stood at Rs 5,840 crore, reflecting a strong double-digit growth driven by rising demand for branded motorcycle accessories, lubricants, and merchandise.

Over the past five years, Hero MotoCorp has achieved a sales CAGR of 6.9 percent.

EBITDA Growth

EBITDA for FY25 increased by 11 percent year-over-year to Rs 5,946 crore, aided by favorable raw material prices, improved product mix, and effective cost-control initiatives.

In FY24, EBITDA surged 30.7 percent year-over-year to Rs 5,350 crore, driven by raw material price softness, product mix optimization, and price hikes. The company’s five-year EBITDA CAGR stands at 7.9 percent.

Profit After Tax (PAT)

For FY25, net profit climbed 17 percent year-over-year to Rs 4,537 crore, supported by strong operating margins and higher other income.

In FY24, PAT increased by 38.1 percent year-over-year to Rs 3,862 crore, reflecting improved operational efficiency, lower finance costs, and increased income from investments.

Hero MotoCorp’s five-year PAT CAGR is 4.6 percent.

Profitability Metrics

EBITDA Margins

The company’s ICE segment EBITDA margin for FY25 improved by 90 basis points to 16.2 percent. Including its investments behind EVs (~Rs 630 crore), overall EBITDA margin expanded 40 basis points year-over-year to 14.5 percent.

In FY24, EBITDA margins rose 218 basis points to 14.2 percent due to lower input costs, premium product mix, and pricing actions.

PAT Margins

PAT margin for FY25 reached 11.1 percent, while FY24 recorded a PAT margin of 10.2 percent.

Return Ratios

FY25 ROE improved owing to higher profits.
FY24 ROE stood at 21.8 percent.
FY24 ROCE increased to 29.5 percent, though FY25 saw a decline due to higher capital employed.

Cash Flow and Financial Health

Hero MotoCorp maintains strong liquidity and balance sheet strength:

Cash Flow from Operations for FY25: Rs 4,297 crore.
Cash Flow from Operations for FY24: Rs 4,923 crore.
Net cash used in investing activities FY25: Rs 1,703 crore.
Net cash used in financing activities FY25: Rs 2,815 crore (mainly dividend payouts).
Capex guidance for FY25: Rs 1,000-1,200 crore toward new product launches, capacity expansion, and EV development.

Hero MotoCorp remains largely debt-free, with short-term borrowings at only Rs 457 crore and no long-term debt as of March 2025.

Strong Working Capital & Efficiency Metrics

Working capital cycle remains efficient with channel inventory at 4-5 weeks.
Asset turnover ratio for FY25 stood at 1.47 times, while FY24 registered 1.5 times.
Free Cash Flow per share for FY24 was Rs 236.

The company’s consistent capital allocation discipline supports its growth while generating healthy free cash flows.

Valuation and Shareholder Returns

Hero MotoCorp trades at a price-to-earnings ratio of 19.93x, reflecting market optimism around its premium product launches, international expansion, and EV plans.

The company continues to reward shareholders with attractive dividends:

FY25 total dividend: Rs 165 per share, including a final dividend of Rs 65 and interim dividend of Rs 100.
FY24 dividend payout ratio stood at 75 percent.

Management Transition and Governance

In April 2025, CEO Niranjan Gupta stepped down, and Vikram Kasbekar, Executive Director, was appointed Acting CEO. Several leadership changes were also implemented to support key business verticals, including manufacturing, India business, HR, and EV operations.

The EV and Emerging Mobility Business Unit has been made fully independent and empowered to drive Hero’s long-term EV strategy.

Shareholding Pattern

As of Q4 FY25:

Promoter holding: 34.74 percent
FIIs: 27.42 percent (declined marginally)
DIIs: 27.91 percent (increased marginally)
Notable public shareholders include LIC of India, ICICI Pru Bluechip Fund, Kotak Flexi Cap Fund, and NPS Trust.

EV Expansion and Future Outlook

Hero MotoCorp’s EV journey is rapidly scaling:

Current monthly EV scooter sales: 4,000 units.
Targeting 25,000-30,000 monthly sales by FY28.
Launched VIDA V2, with market share exceeding 20 percent in 30 towns and 10 percent across 60 towns.
Planned launch of two new affordable EV products in July 2025.
Acquired a 34.1 percent stake in Euler Motors, further strengthening its electric mobility portfolio.

The EV division aims to leverage higher volumes, increased localization, and PLI scheme benefits to achieve profitability.

Industry Outlook: Growth Momentum Ahead

In FY25, India’s domestic two-wheeler market grew to approximately 2 crore units, while exports reached 42 lakh units.
Scooter share increased to 35 percent of two-wheeler volumes, with motorcycles contributing the rest.
India’s electric two-wheeler market witnessed 21 percent year-over-year growth, crossing 11.5 lakh units.
FY26 is expected to witness stronger growth due to rural income recovery, robust monsoon forecasts, increased demand for premium ICE models, and expanding EV penetration.

Long-Term Stock Outlook

Hero MotoCorp’s stock has demonstrated significant appreciation, rising from Rs 2,250 levels in March 2023 to Rs 6,246 in September 2024. Long-term investors may consider accumulation in the Rs 3,200-3,400 zone, with potential upside towards Rs 6,400-6,800 levels as EV growth accelerates.

Conclusion

Hero MotoCorp stands at the forefront of India’s two-wheeler industry transformation. Its solid market leadership, expanding global presence, strong partnerships, aggressive EV roadmap, and robust financial health collectively position it for sustained long-term growth.

With consistent sales growth, margin improvement, efficient capital allocation, and ambitious product innovation, Hero MotoCorp continues to deliver value to its shareholders while shaping the future of mobility both in India and abroad.

For latest updates, product information, and investor details, visit the official website: Hero MotoCorp.

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