Hero MotoCorp reports a 22.7% rise in dispatches last quarter, outperforming the market with strong demand and a focus on expanding electric mobility, as margins face pressure from raw material costs.
Hero MotoCorp posted a strong June quarter, with dispatches rising 22.69% year-on-year to 16,77,313 units, according to company data cited by NDTV and other reports. Revenue growth was even faster, helped by higher volumes, firmer pricing and a better mix of higher-value businesses, including parts, accessories and merchandising. The company’s operating performance also held up better than expected despite pressure from raw material costs.
The quarter’s standout was the pace of demand. Hero MotoCorp outpaced the wider two-wheeler market, where industry volumes rose 14% in the quarter, and it expects that momentum to continue into the September quarter. Management is also signalling that the sector should still deliver high-single-digit volume growth for the full year, supported by new launches and product updates.
Within the portfolio, the premium shift is becoming clearer. Motorcycle sales in the 100cc category rose 11.5% year-on-year, lifting market share to 85.8%, while 125cc volumes increased 45.4%, suggesting stronger traction in higher-value commuter bikes. In scooters, internal combustion engine models climbed 84% year-on-year, taking share to 6.9%. The Vida electric business was another bright spot, with volumes up 151% and retail sales up 163% to 57,000 units. Market share in EVs improved to 10.9%.
Hero MotoCorp is also leaning harder into electric mobility. According to a report by Sahi.com, the company is targeting more than 10% growth in FY27 by expanding production and distribution of electric scooters through the Vida brand. Financial Express reported that the company is preparing roughly ₹1,500 crore in capital expenditure to expand EV and scooter capacity, with total EV capacity expected to triple to 45,000 units by the end of FY27.
Margin pressure remains the main risk. Gross margin fell 480 basis points year-on-year to 28.5%, but operating profit still came in ahead of estimates because other expenses were tightly controlled, rising just 9% despite the sharp increase in volumes. The company has said it expects a modest rise in commodity costs in the second quarter and plans to offset that through mix improvement, cost savings and deferred spending on non-essential items.
Brokerages remain constructive. Choice Equity Broking said refreshed products and a richer product mix should support growth, though it trimmed earnings forecasts to reflect short-term margin strain. Motilal Oswal Research pointed to improving rural sentiment, stronger scooter performance and better export momentum, while Prabhudas Lilladher Research said the near-term focus has shifted towards volume growth and absolute operating profit, even as Hero MotoCorp keeps its medium-term EBITDA margin guidance at 14% to 16%.
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