Hero MotoCorp maintains its EBITDA margin target of 14–16% while accelerating electric vehicle capacity expansion, navigating input cost pressures and boosting overseas presence amid strong operational momentum.
Hero MotoCorp has set out an ambitious medium-term plan, telling investors it wants to hold EBITDA margins in a 14% to 16% range even as it steps up investment in electric vehicles and capacity expansion. The company’s latest quarterly update showed the strain of higher input costs, with gross margin under pressure from dearer freight, oil and metals, yet management said it expects the wider two-wheeler market to deliver near-double-digit growth in the second half of the fiscal year.
The strategy is being underpinned by strong operating momentum. In the quarter, standalone revenue from operations climbed 35.7% year on year to ₹12,999 crore, while standalone net profit rose 29.13% to ₹1,454 crore. Volumes increased 23% to 16.77 lakh units, helping to offset some of the margin squeeze and supporting the company’s confidence that scale can keep cushioning profitability even as commodity costs remain volatile.
Hero is also leaning on cost control. Management said it is using calibrated spending, pricing action and its LEAP cost-saving framework to protect returns through the current inflationary patch. That stance matters because blended EBITDA margin slipped to 13.3% in the quarter from 14.5% in the previous one, reflecting the impact of higher freight and raw material costs. Even so, the company’s willingness to keep its margin target intact suggests it believes pricing and cost stabilisation will improve as the year progresses.
At the same time, the company is accelerating its push into electric mobility. Hero expects EV capacity to rise to 30,000 units a month by August 2026 and to 45,000 units a month before the end of fiscal 2027, effectively tripling the original base. That expansion sits alongside a broader capital spending plan that industry reports say includes ₹1,500 crore for FY27 to double scooter production capacity and more than ₹700 crore for a global parts centre in South India. The company has also been widening its overseas footprint, entering Germany as its 53rd market and lifting export volumes sharply, signs that it is trying to build growth beyond its core commuter business while the transition to EVs gathers pace.
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