Hero MotoCorp Limited

Nature of Disclosure: Earnings conference call transcript for Q2 FY27 (quarter ended September 30, 2026), filed pursuant to Regulation 30 of SEBI LODR Regulations.

Financial Performance (Standalone):

  • Revenue from operations: ₹14,687 crores, up 21% YoY
  • EBITDA: ₹1,968 crores, up 8% YoY
  • Profit After Tax: ₹1,456 crores, up 5% YoY
  • Cash flow from operations: ₹2,159 crores (nearly doubled YoY)
  • EBITDA margin: 13.4% (10 bps expansion QoQ)

Financial Performance (Consolidated):

  • Revenue: ₹14,971 crores, up 23% YoY
  • PAT: ₹1,861 crores, up 41% YoY (includes ₹397 crores one-time gain from equity consolidation of an associate company)

Volume Performance:

  • Total wholesale volume growth: 10.5% YoY
  • ICE business growth: 8.4% YoY
  • EV business growth: 98% YoY
  • VIDA EV retail: 66,000 units (74% YoY growth)

Market Share & Segment Performance:

  • Gained ICE market share every month of Q2 FY27
  • ICE retail growth: 24% YoY (outpaced industry)
  • Scooter portfolio: Fifth consecutive quarter of market share growth
  • ICE scooter dispatches: 34% YoY growth in Q2, >50% in H1 FY27
  • Scooter mix increased by 3 percentage points in business mix
  • 100cc motorcycle category: 10% growth in Q2, 11% in H1
  • Splendor growth: >20% with XTEC variant contributing >25% of volumes
  • VIDA EV market share: Gained 170 bps in H1 FY27
  • Premium portfolio: >30% retail growth in H1 FY27, >35% market share in adventure bike segment

Capacity Expansion:

  • EV capacity: Expanded to 30,000 units/month in September (from 15,000 at end of FY26)
  • Target: 45,000 units/month by Q4 FY27; 80,000+ units/month by Q2 FY28
  • ICE scooter capacity: Doubled to 80,000 units/month
  • Premium assembly line expanded at Neemrana facility

Parts Business:

  • Revenue growth: 27% YoY in Q2 (second consecutive quarter >25% growth)
  • Global Parts Center 2.0: ₹700+ crores investment in greenfield expansion at Tirupati
  • Will double parts handling capacity; operational by end of CY27

Global Business:

  • Faced logistical challenges in key markets (Colombia - 25% of exports, Bangladesh)
  • Colombia impacted by earthquake; Bangladesh by fuel price increases
  • Retail growth: 19% despite dispatch challenges
  • Expansion plans: Brazil (manufacturing facility), Mexico, Africa

EV Business (VIDA):

  • Turned gross margin positive in Q2 (ahead of guidance)
  • EV drag reduced to ₹168 crores in Q2 (from ₹232 crores in Q1)
  • EV revenue: ₹1,000 crores in Q2
  • PLI benefits: ₹63 crores recognized (6.5% of EV revenue); 70% portfolio qualified in Q2
  • 100% portfolio PLI certified in October 2026
  • Premium variants (4.4 kW) performing best
  • Retail outlets: 700 total, 450 regularly supplied

Cost Management:

  • Commodity inflation: 1% QoQ (steel, aluminum, plastic, rubber, freight)
  • Mitigation through: premium mix, LEAP savings, discretionary spending cuts, operating leverage, pricing actions
  • Price increase: ₹1,000/unit effective October 1, 2026

Guidance & Outlook:

  • Q3 FY27: Expect stable margins despite input cost inflation pressure
  • Medium-term target: EBITDA margin corridor of 14-16%
  • Industry outlook: Mid to high single-digit growth during festival period
  • Capex: FY27 guidance of ₹1,500 crores; ₹600 crores deployed in H1
  • Premium segment: 3-4 key launches planned in remaining FY27

Management Commentary:

  • Rural demand performing equal to or better than urban
  • Festival period (100-day) growth: 24%
  • Flex-fuel vehicles: 15,000 dispatches in 2+ months
  • No compromise on growth investments despite margin pressure