Economic Environment
The Global Macroeconomic Landscape:
Heightened Uncertainty and Structural Realignment
The global economy is currently characterised by elevated structural and systemic uncertainty, driven heavily by escalating trade tensions and the outbreak of the US-Iran war. This has compelled stakeholders, including consumers, corporations, and governments, to re-evaluate their foundational economic assumptions. Geopolitical fragmentation has emerged as the primary catalyst, ratcheting up uncertainty across all operational corridors. Consequently, several economies have downward revised their macroeconomic outlooks amid intensifying headwinds. In its April 2026 publication, the International Monetary Fund (IMF) slashed CY 2026 global GDP growth by 20 bps to 3.1%. Mirroring this cautious stance, the World Bank also downgraded its CY 2026 world GDP growth forecast to 2.5%, down from its previous estimate of 2.9%.
Rising Skirmishes
Multiple high-intensity conflicts are simultaneously reshaping the global landscape. The geopolitical arena has been profoundly disrupted by the US-Iran war, which led to the closure of the strategic Strait of Hormuz; severely limited global energy supplies. On top of this, the Russia-Ukrainian War is entering its fifth year, keeping supply chain disruptions elevated. In parallel, the risk of escalating trade disputes continue to weigh on global economic sentiment, with limited policy clarity constraining investment decisions.
Trade Wars
The global trade architecture has entered a period of substantial reorientation following the commencement of Trump 2.0 administration. The shift from multilateral cooperation toward aggressive protectionism has triggered a series of retaliatory ‘trade wars, characterised by a baseline 10-20% universal import tariff and targeted heavy tariffs on Chinese goods. These measures have disrupted long-standing ‘just-in-time supply chains, forcing a transition toward
‘multi-local and ‘friend-shoring models to mitigate geopolitical risks.
For the automotive sector, the operating environment has been particularly volatile; with the repeal of EV-linked tax credits and the threat of bilateral tariff escalations. Even the World Trade Organization (WTO) recently flagged downside risks to global trade due to rising protectionist policies. Moreover, the conflict in West Asia has compelled OEMs to re-work their cost arithmetic; which had already been facing pressures owing to supply constraints with regards to Heavy Rare Earth Elements (HREs).
Amidst this global upheaval, India has emerged as a harbour of stability, owing to policy certainty, economic resilience and stable growth. Notwithstanding, virtually no economy can remain unaffected by volatility in the external environment. Given the inherent interconnectedness of the modern financial system, historical precedents such as the Great Financial Crisis of 2008 and the 2020 pandemic have explicitly and amply demonstrated that containing a domino effect is increasingly challenging.
Geopolitical Reshaping
The conflict in West Asia, however, has transcended regional boundaries, suggesting emergence of a new global order. The conflict has reintroduced stagflationary risks to the forefront of global economics.
Analysts rightly observe that escaping the clutches of stagflation is a daunting task,astheresultinginflation cannot be easily resolved via conventional monetary policy.
Hence, the markets are cautiously tiptoeing with a fragile peace deal to West Asia conflict in the background.
Monetary Path Pivot
Until March, most major central banks, including the US Fed, the European Central Bank (ECB), the Bank of England (BoE) and the Peoples Bank of China (PBoC), had underlined a path of policy rate cuts on account of the neutralisation of inflation. From the highs of 9.1% during June 2022, the US consumerpriceindex(CPI)inflation dropped to 2.4% in February, reverting to the US Feds target of 2%. A similar trend could be long-term observed for the European Union (EU).
However, a myriad of supply-side disruptions in March have derailed that path. Resultantly, the US consumer prices rose by 4.2% YoY during May. Moreover, on a monthly basis, it sharply rose by 0.5%. Further, falling bullion prices amid rising uncertainty are a key testimony that further policy rate cuts are unlikely to occur as earlier anticipated. Until the end of February, financial markets had priced in rate cuts, which might have lowered credit and investment costs. Though, the S&P 500 hit an all-time high in recent weeks; the global equity markets will continue exhibiting heightened volatility until more visibility is available on the geopolitical front.
Supply-side Disruptions
Brent crude is currently trading at elevated levels compared to earlier this year. Various projections had been drawn based on the durationandintensityoftheconflict in West
Asia. Additional clarity might emerge on this front once the extent of damage to the physical infrastructure becomes known. reverberations owing to energy Moreover,the market disruption caused by the commencement of the full-scale Russian-Ukrainian war in February 2022 (when crude peaked at US$ 140/bbl) can still be felt by several major economies. In this context, one of the major implicit factors stoking up inflationary pressures is inflationary expectations.
Alternative Energy Options Back in Focus
Qatari officials have noted that the ongoing shrunk the nations total LNG export capacity by over 17%. QatarEnergy has declared force majeure on some long-term supply contracts, with expectations that these disruptions could last for up to five years. Tangible and intangible damage to energy infrastructure might amp up medium-term inflationary expectations, which, in turn, might make it even more challenging to counter inflation.
Several commentators have noted that this might redirect the focus of alternative energy.
Hero MotoCorp is strongly positioned to benefit from the structural change with the rising market share of VIDA in the e2W space. Historical evidence indicates that during periods of rising fuel prices, Indian consumers tend to
‘down-trade towards the entry-level motorcycle segments for better fuel economy. As the dominant market leader in this category, Hero MotoCorp is uniquely positioned to capture this shift in demand.
Further, anecdotal evidence and theoretical models indicate that ongoing supply-side disruptions have already led to downward pressure on output, while logistics costs and trade disruptions have expanded. Going forward, this might be a litmus test for corporations and policymakers alike, and Hero MotoCorp is prepared to meet it.
Technological Transitions
The global technological landscape is currently being redefined by a transformative AI wave, marking a shift from basic automation to the era of Agentic Models. Unlike traditional systems, these autonomous agents are capable of independent reasoning and goal-oriented execution; revolutionising industries by unlocking unprecedented productivity gains and operational efficiencies worldwide. In this new paradigm, the long-term resilience of corporations and economies is increasingly a function of their adaptability and the strategic integration of these cognitive technologies. Aligned with our vision, Be the Future of Mobility, Hero MotoCorp is committed to pushing the boundaries of innovation.
Outlook
The global macroeconomic landscape for FY 2026-27 could be characterised by a transition from steady recovery to a period of heightened supply-side fragility and stagflationary risk. While the year began with a baseline growth projection of
~3%, the disruption owing to the ongoing conflict in West Asia has forced a downward revision of global GDP. Brent crude has risen sharply owing to one of the largest oil supply disruptions in history, while advanced economies are facing renewed inflationary pressures that are likely to defer the anticipated global monetary easing cycle. Furthermore, the conflict in West Asia has heightened geopolitical uncertainty, disrupted critical trade and energy corridors, and intensified concerns around global supply chain resilience. Going ahead, nations are likely to look further inwards with regard to their supply chains, including energy security. Moreover, the conflict may accelerate the transition towards an increasingly multipolar global system.
| GDP Trend (%) | CY25 | CY26 | CY27 |
| Global Output | 3.4 | 3.1 | 3.2 |
| Advanced Economies | 1.9 | 1.8 | 1.7 |
| United States | 2.1 | 2.3 | 2.1 |
| Euro Area | 1.4 | 1.1 | 1.2 |
| UK | 1.3 | 0.8 | 1.3 |
| Emerging Markets | 4.4 | 3.9 | 4.2 |
| China | 5 | 4.4 | 4 |
| Russia | 1 | 1.1 | 1.1 |
| Middle East & Central Asia | 3.6 | 1.9 | 4.6 |
| Sub-Saharan Africa | 4.5 | 4.3 | 4.4 |
| India | 7.6 | 6.5 | 6.5 |
| Source: IMF |
Indian Economy
India Continues Exhibiting Resilience
While the global geopolitical fabric undergoes a structural change, India has emerged not merely as a participant, but as a beacon of stability in an increasingly fragmented world. During FY 2025-26, the Indian economy demonstrated a rare confluence of elevated growth, low resilience. For Hero MotoCorp, this stability provided more than just a favourable backdrop; it offered a strategic ‘moat. While the global order grapples with systemic mistrust and shifting alliances, the Indian domestic market acted as a robust home base, allowing us to maintain our leadership for 25 consecutive years and advance our mission to define the ‘Future of Mobility.
Worlds Fastest-growing Major Economy
As per RBI, Indias GDP grew by 7.7% during FY 2025-26. This continues to remain a standout global performance, significantly outpacing other major economies, amidst glaring external uncertainty. This growth has been driven by a genuine revival in both urban and rural demand, gains accrued from long-term structural changes, and GST rationalisation. The year under review registered an above-normal South West (SW) monsoon ending at 108% LPA (long-period average), which, coupled with strong nominal wage growth, led to a much-anticipated recovery in the rural heartland.
Inflation Dynamics: Navigating a Tightrope
CPI inflation rose to 3.93% during May 2026. However, retail inflation has remained under 5% since the start of CY 2025. The RBI effectively steered headline inflation towards its 4% target, providing consumers with the price stability required for long-term financing commitments. However, the Indian Meteorological Departments (IMD) SW monsoon forecast for FY 2026-27 will require close monitoring, given its potential implications for inflation and rural demand. Notwithstanding, the recent supply-side disruptions introduce a new layer of complexity.
As an oil-importing nation, the ‘imported inflation from
West Asian disruptions threatens to rattle the cooling price index. While sharp rises in energy prices remain a tail-risk; the Indian economys improved energy mix and strategic reserves provide a better buffer than in the 1970s. Until the supply-side shocks of March, the Indian financial markets had priced in a loose monetary policy. While the global derailment of the ‘rate cut path by the major monetary authorities has necessitated a cautious
‘wait and watch stance by the RBI, the Indian credit ecosystem remains liquid.
Path of Fiscal Consolidation Continues
The Union Budget for FY 2026-27 served as a major confidence booster for the corporate sector and global investors. The state has remained steadfast on its commitment to fiscal consolidation and capex-led growth. The fiscal deficit for FY 2025-26 has been contained at 4.4% of GDP, in line with stated targets, with a further calibrated reduction of 10 bps budgeted for the upcoming fiscal year. Moreover, current fiscal math warrants its credibility.
Capital expenditure for FY 2026-27 is set to rise by ~11.5% to 12.1 trillion. This has signalled to global financial markets that India is committed to its long-term macroeconomic health. Moreover, persistent focus on rural roads and national highways is expected to enhance connectivity, stimulate economic activity and support demand generation across hinterland markets. For Hero
MotoCorp, these developments are structurally positive, given the strong correlation between infrastructure expansion and mobility demand in core segments.
GST Rationalisation
The implementation of GST 2.0 and the subsequent GST rationalisation in September 2025 represent a definitive shift in Indias fiscal policy. By overhauling taxation and reducing rates across several key sectors, the
Government has directly addressed affordability for the end-consumer. This broad-based tax relief is expected to serve as a significant consumption catalyst, lowering the tax burden and unlocking aggregate demand across the national economy.
Technological Leadership: The New Delhi AI
Summit
In February 2026, the AI Impact Summit in New Delhi marked a watershed moment. As the first major AI summit hosted in the Global South, it positioned India as a leader in ‘impact-driven rather than just ‘generative AI. The summit drew over 2,00,000 visitors, 500 global AI leaders and heads of major firms like Alphabet, Anthropic and OpenAI.
It focused on how developments in AI can accelerate Indias journey towards the ‘Viksit Bharat@2047 vision.
The consensus at the summit was clear: productivity gains in the next decade will be a function of AI integration. We view AI not just as a tool for manufacturing efficiency, but as a core component of the ‘Future of Mobility.
Our adaptability and industry-first approach to these technological shifts will continue offering us a sharper competitive edge.
Economic Resilience Amid Global Volatility
The Indian economy in FY 2025-26 has maintained a notable degree of relative stability amid severe global uncertainty. Moreover, Indias policy certainty and the long-term structural reforms have created a platform for sustained growth and development.
Outlook
As India enters FY 2026-27, the RBI has revised downward GDP growth projections by 30 bps to 6.6%. This moderation is primarily driven by the West
Asia conflict resulting in supply chain disruptions, projected increase in inflation from volatile crude oil prices and adverse weather events rising from a possibility of weak monsoon due to El Nino.
However, sustained momentum in the services sector, persistent impact of GST rationalisation, rising capacity utilisation in manufacturing, and healthy balance sheets of financial institutions and corporates should continue to support domestic demand.
Two-wheeler Industry Section
Global Two-wheeler Industry
The growth of the global two-wheeler market is driven by rapid urbanisation, a rise in disposable incomes, an improvement of road infrastructure and the demand for fuel efficiency. The expansion of the middle-class population and the adoption of new technologies for sustainability are expected to further drive market expansion, with the global two-wheeler market expected to reach US$ 201 billion by 2034.
Source: https://www.fortunebusinessinsights.com/two-wheeler-market-106884
Indian Two-wheeler Industry
The domestic two-wheeler industry attained a landmark milestone in FY 2025-26, with wholesales reaching an all-time high of 21.7 million units. This historic volume was achieved despite a cautious start to the fiscal year driven by muted consumer sentiment in the broader economy—as well as headwinds toward the close of the period following the geopolitical conflict in West Asia.
Wholesale volumes during the year successfully surpassed the previous cyclical peak established in FY 2018-19, signalling the industrys definitive transition into a robust structural growth phase. The 10.7% YoY expansion achieved in FY 2025-26 further solidifies a multi-year upward trajectory, underscoring a resilient and sustained recovery (following growth of 9% in FY 2024-25, 13.3% in FY 2023-24, and 16.9% in FY 2022-23).
The sectors expansion was fundamentally powered by strengthening demand dynamics, with growth momentum accelerating notably in the second half of the fiscal year. This progress was catalysed by a stable domestic macroeconomic environment and a suite of proactive, forward-looking government policies that effectively revitalised market sentiment. Key structural pillars supporting this growth included:
Fiscal Stimulus via Personal Taxation: The Union
Budget (FY 2025-26) provision for zero income tax on annual incomes up to 1.2 million (up from 0.7 million) significantly augmented household purchasing power.
Monetary Easing: A cumulative 125 basis point reduction in the RBI repo rate, which was reduced from 6.5% in February 2025 to 5.25% by December 2025, substantially lowered finance costs.
Agricultural Resilience: Three consecutive years of strong, post-COVID monsoons led to record-high reservoir levels, providing a vital foundation for rural prosperity.
Price Stability: A stable macroeconomic backdrop characterised by consistently falling inflation bolstered consumer confidence.
GST 2.0 Reform: The landmark 10% GST rate reduction for the sub-350cc two-wheelers addressed long-standing affordability challenges, unlocking demand across the sector.
GST 2.0 Reform
In a landmark restructuring of Indias indirect tax system, the 56th GST Council introduced the GST 2.0 reform, effective September 22, 2025. This reform replaced the five-tax-slab structure in the erstwhile GST regime with a simplified two-primary-slab system (5% and 18%), aimed at stimulating mass-market consumption and enhancing ease of compliance. A pivotal outcome for the two-wheelers in the sub-350cc segment, which accounts for the vast majority of Indian mobility, was the reclassification from the 28% bracket to the 18% tax rate.
This move effectively recognised the two-wheeler as an essential tool for livelihood, addressing a long-standing industry representation.
Demonstrating a consumer-first approach, the two-wheeler industry passed on the full benefit of GST rate cuts to end-users. This led to significant price reductions, ranging from approximately 5,800 for entry-level models to 22,000 for premium motorcycles, across the industry. This rationalisation significantly enhanced accessibility and affordability, particularly across rural and semi-urban markets. For the lower-middle-class segment, where two-wheelers serve as vital enablers of economic opportunity and social empowerment, the lower cost of ownership acted as a catalyst for renewed demand.
The strategic timing of the GST rollout was a critical driver of the years performance, coinciding with the onset of the festive season from Navratri through Diwali, providing a powerful dual stimulus to consumer sentiment. The resulting momentum led to the two-wheeler industrys highest-ever festive retail performance, totalling 4 million units, up 21.8% YoY during the 42-day festive period. Crucially, post-festive demand continued to remain strong, defying the traditional seasonal dip, with Q4 FY 2025-26 recording a strong retail growth of 25% YoY for the industry. Unlike temporary promotional schemes, the GST 2.0 reform does not feature a sunset clause, providing a permanent structural correction to vehicle pricing. This enduring shift has fundamentally addressed the affordability and sentiment barrier that had previously constrained the market, successfully encouraging a significant influx of
‘fence-sitters to return to the showrooms.
Urban and Rural Market Dynamics
Urban markets, which began the fiscal year with subdued sentiment and challenging demand conditions, underwent a notable resurgence during the second half of
FY 2025-26. This revival was underpinned by a significant uptick in disposable income, fuelled by favourable tax reforms and a declining interest rate environment.
This recovery was further accelerated by the GST 2.0 rationalisation, which acted as a powerful catalyst for the premium motorcycle and scooter segments, effectively lowering the entry barrier for aspirational buyers.
Rural markets remained upbeat throughout the year, benefitting from the cumulative impact of three consecutive years of favourable monsoons. With reservoir levels reaching historic highs and agricultural productivity remaining robust, the sustained agrarian success has translated into strengthened purchasing power for rural households. Combined with GST rate cuts, these factors have led to encouraging early signs of recovery within the
100cc motorcycle portfolio.
The industry anticipates this momentum to continue into
FY 2026-27. This progress will be structurally supported by a widening pool of aging vehicles on the road that are naturally approaching the end of their operational lifespans effectively triggering a replacement cycle and the ongoing permeation of the full benefits of the GST rate cuts in the Entry and Deluxe 100cc segments.
| Domestic Dispatch Performance of the 2W Industry | FY 2024-25 | FY 2025-26 | YoY |
| Motorcycle | 12,252,305 | 13,064,789 | 6.6% |
| ICE Scooter | 6,080,121 | 7,031,130 | 15.6% |
| EV Scooter | 773,093 | 1,086,815 | 40.6% |
| Mopeds | 501,813 | 523,240 | 4.3% |
| Total | 19,607,332 | 21,705,974 | 10.7% |
| Source: SIAM |
Two-wheeler Segmental Contribution
Motorcycles continued to hold the predominant share of the Indian two-wheeler market at 60.2%, though their contribution declined by 2.3% YoY. This contraction was primarily driven by the increasing contribution of the scooter segment by 1.4% YoY to 32.4%, caused by increased momentum in urban and semi-urban markets. The EV segment marked increased penetration in
FY 2025-26, driven by a meaningful acceleration towards the end of the financial year in March 2026. This late-year surge was primarily driven by fuel supply disruptions and the expected increase in prices stemming from the West Asia conflict, alongside pre-emptive buying ahead of the anticipated expiry of the PM E-DRIVE subsidy scheme in March 2026 (which was subsequently extended to July 2026). This resilient performance was achieved despite early-year headwinds, including a moderation in demand post-GST rate cuts due to reduced arbitrage and sharp price hikes across the EV industry. Meanwhile, mopeds continued to face a structural decline, with their market share contracting to 2.4%.
| FY 2024-25 | FY 2025-26 | YoY | |
| Motorcycle | 62.5% | 60.2% | -2.3% |
| ICE Scooter | 31.0% | 32.4% | 1.4% |
| EV Scooter | 3.9% | 5.0% | 1.1% |
| Mopeds | 2.6% | 2.4% | -0.1% |
| Source: SIAM |
Outlook for Motorcycle Segment
While the share of motorcycles dipped this year, the segment is expected to recover supported by the following catalysts:
Recovery in Replacement Demand: The commuter motorcycle segment is already showing green shoots of a steady turnaround. The momentum is expected to continue in FY 2026-27, driven structurally by a widening pool of aging vehicles on the road that are naturally approaching the end of their operational lifespans—creating a necessity for upgrades—alongside the ongoing permeation of GST cut benefits across the market.
Momentum in Premium Motorcycles: The premium motorcycle segment received a powerful impetus in
FY 2025-26, as GST tax rationalisation lowered barriers for first-time buyers and accelerated consumer uptrading. This increased demand trajectory is expected to continue, further sustained by a strong pipeline of new product launches across the industry during the year.
Retail Performance
Domestic Automotive Industry
The domestic automotive industry achieved a historic milestone in FY 2025-26, recording all-time high retail sales of 29.7 million units. This 13.3% YoY expansion was catalysed by the strategic GST rate reduction, which effectively addressed affordability challenges of the consumers. Growth was broad-based across segments, led particularly by tractors, which grew by 18.9% YoY, reflecting the renewed strength and resilience of the rural economy. The Passenger Vehicle segment reached a historic milestone, surpassing the 4.7 million unit mark for the first time with 13% YoY growth.
Domestic Two-wheeler Industry
The Two-wheeler segment reclaimed pre-pandemic retail levels with 21.4 million units a robust 13.4% YoY increase. This performance was characterised by broad-based momentum, as both urban and rural markets consistently delivered growth.
During the first five months (April to August 2025), retail growth in the two-wheeler segment remained muted at
2.4% YoY. However, the landscape shifted dramatically post September 2025, with the implementation of GST rate rationalisation. The reform acted as a powerful catalyst, triggering a 52% YoY growth in October 2025 and a strong 21.8% YoY increase during the 42-day festive window. This momentum sustained well beyond the festivities, with the final quarter (January to March 2026) recording retail growth of 25% YoY, leading to full year growth of 13.4% despite a slow start to the year. This acceleration fundamentally underscored the transformative impact of the GST cut in unlocking mass-market affordability and revitalising both urban and rural demand.
Retail Performance of the Domestic Auto Industry
| FY 2024-25 | FY 2025-26 | YoY | |
| 2W | 18,889,595 | 21,420,386 | 13.4% |
| 3W | 1,220,834 | 1,363,412 | 11.7% |
| PV | 4,163,927 | 4,705,056 | 13.0% |
| Tractors | 882,825 | 1,050,077 | 18.9% |
| CV | 949,406 | 1,060,906 | 11.7% |
| CE | 80,668 | 71,227 | -11.7% |
| Total | 26,187,255 | 29,671,064 | 13.3% |
Source: FADA
Urban vs. Rural Retail Performance of the Domestic Auto Industry
| Category | Urban | Rural |
| 2W | 15.21% | 12.11% |
| 3W | 6.1% | 16.7% |
| PV | 10.4% | 17.1% |
| Tractors | 12.5% | 11.0% |
| CV | 22.4% | 18.2% |
| CE | -9.0% | -13.7% |
| Total | 13.6% | 13.1% |
| Source: FADA |
Export Sector
Exports of the two-wheeler industry registered strong momentum, achieving its highest-ever dispatches of more than 5 million units, marking a robust 23.4% YoY growth.
This record-breaking performance was primarily driven by the following key factors:
Geographic Diversification: Sustained demand from
Latin America and a significant volume pickup from Asian markets like Bangladesh, Sri Lanka and Nepal, while Africa showed positive momentum by recovering from its bottom.
Macroeconomic Stabilisation: A combination of easing inflation, improved foreign currency availability, and stabilising interest rates across key emerging markets revitalised purchasing power.
Portfolio Realignment: Manufacturers successfully introduced region-specific models that resonated with international consumers seeking reliable commuter and performance options.
| Exports Dispatch Performance of the 2W Industry | |||
| FY 2024-25 | FY 2025-26 | YoY | |
| Motorcycle | 3,620,886 | 4,476,516 | 23.6% |
| ICE Scooter | 562,254 | 674,233 | 19.9% |
| EV Scooter | 6,845 | 8,698 | 27.1% |
| Mopeds | 8,424 | 20,982 | 149.0% |
| Total | 4,198,403 | 5,180,429 | 23.4% |
Source: SIAM
Hero MotoCorp Performance: 25th Consecutive Year of Market Leadership
Hero MotoCorp achieved a total sales volume of 6.5 million units across its domestic and international ICE and EV portfolios, representing a robust growth of 9.7% over the previous fiscal year. This exceptional performance ensured that Hero MotoCorp maintained its position as the worlds largest manufacturer of motorcycles and scooters for the 25th consecutive year.
Growth was particularly pronounced in the high-growth segments of the two-wheeler industry, notably ICE and EV scooters, premium motorcycles and Global Business. Following this strong volume trajectory, the company reported its highest-ever financials, with Revenue, EBITDA, and Profit After Tax (PAT) reaching record levels of 46,830 crore, 6,871 crore, and 5,268 crore, representing a growth of 14.9%, 17.1%, and 14.3%, respectively.
Key Trends in the Two-wheeler Industry
The Indian two-wheeler industry in FY 2025-26 witnessed a continuation of post-pandemic structural shifts, most notably the ongoing premiumisation trend driven by a K-shaped consumer recovery. This momentum accelerated further within the sub-350cc premium motorcycle segment, catalysed by the rationalisation of GST to 18% and product refreshes by manufacturers.
Concurrently, the trend of scooterisation continued to strengthen and picked up further momentum, propelled by rapid urbanisation and a rising demographic of working women seeking reliable, convenient mobility solutions. In contrast, the electric vehicle (EV) transition followed a back-loaded growth trajectory registering a sharp, meaningful acceleration in March 2026, driven by fuel supply anxieties stemming from the West Asia conflict and pre-emptive purchasing ahead of expected rollback of subsidies.
Parallel to these evolving demand dynamics, the sector navigated an intricate landscape of supply-side headwinds that rigorously tested operational resilience. Global supply chains faced disruptions from a critical shortage of Heavy
Rare Earth Magnets (HREs) following stringent export licensing mandates in China, alongside foundation chip shortage triggered by geopolitical friction.
Toward the close of the fiscal year, a domestic energy supply shock compounded by the West Asia conflict further constrained fuel availability, forcing manufacturers to radically optimise fuel logistics and adopt alternative energy strategies to sustain production. Additionally, a sharp escalation in raw material prices, driven by surging crude oil costs and persistent supply chain bottlenecks, placed pressure on cost structures. This compelled OEMs to implement strict cost-optimisation programmes and selectively pass on price increases to consumers to protect profitability.
At Hero MotoCorp, we are highly cognisant of the structural shifts driving the two-wheeler industry toward premiumisation, scooterisation, and electrification. Capitalising on our 25 consecutive years of global market leadership, we have actively enhanced our positioning across these emerging segments by launching highly differentiated products within our premium motorcycle, scooter, and EV portfolios. To support this product offensive, we are revamping our distribution network to elevate the customer experience while simultaneously investing in brand-building initiatives to enhance our premium imagery. These efforts yielded strong early success in FY 2025-26, characterised by a 27% YoY growth in domestic ICE scooters, a 2.5X surge in VIDA wholesales over FY 2024-25, and a 27% YoY increase in
Harley-Davidson wholesales.
The Post-pandemic Premiumisation Trend
The overarching trend of premiumisation continues to reshape the Indian consumer landscape, driven by a K-shaped recovery post-COVID toward luxury and performance products. This trend, already visible in premium motorcycles following the pandemic, accelerated further in FY 2025-26 as the segment grew by 18% YoY, outperforming the overall motorcycle market.
Acceleration in the Sub-350cc Segment
Following GST rate rationalisation, the sub-350cc motorcycles segment experienced strong momentum as lower entry barriers attracted first-time premium buyers and encouraged consumer uptrading. To capitalise on this organic shift in demand and maximise the benefits of the lower GST regime, manufacturers are pivoting toward mid-capacity platforms, enhancing their lineups with tech-heavy variants, and expanding their market footprint through dedicated sub-350cc motorcycles.
Headwinds in the 350cc+ Category
In contrast, the segment for motorcycles exceeding 350cc entered a period of relative consolidation. Under the revised GST structure, these high-capacity models were classified under a 40% ‘luxury slab, up from the previous effective rate of 31%. However, market prices in this category remained largely stable as most OEMs opted to absorb the tax hike, thereby shielding the buyers from price shocks. However, the segment remains sluggish compared to the booming 150cc 350cc ‘sweet spot, where the combination of tax advantages and product refreshes currently offers a more compelling value proposition for the modern Indian rider. Growth in the below-
350cc segment has significantly outpaced the broader premium category.
Capitalising on this high-growth opportunity, Hero
MotoCorp has plans to launch new products under both the
Hero MotoCorp and Harley-Davidson brands in FY 2026-27 to expand its presence in the 150-350cc premium sweet spot.
Electrification
Back-Ended Growth in the EV Industry
In FY 2025-26, electric two-wheeler retails grew by 21% YoY to 1.46 million units, a trajectory largely in-line with the previous year. While the pace appeared steady for most of the fiscal year, the bulk of this growth was concentrated in March due to the anticipated rollback of the PM E-DRIVE subsidy which was eventually extended to July 2026 and the West Asia conflict, which accelerated the shift toward EV adoption. Consequently, this strong performance in March pushed the final EV adoption rate to 6.6%, up from the 6.2% recorded in the prior year.
Key trends that defined the electric two-wheeler market in FY 2025-26 include the following:
Economic and Pricing impact on the EV Market
Moderation of GST Arbitrage
Following the September 2025 GST rationalisation, the rate on ICE two-wheelers (sub-350cc) was reduced to 18%, while the GST on EVs remained at 5%. This 10-percentage-point reduction in ICE taxation served to moderate the ‘GST arbitrage that previously gave EVs a much sharper edge on a Total Cost of Ownership (TCO) basis. While EVs continue to offer a superior
TCO, this shift effectively reduced the delta between the two platforms.
Undefined Resale Value and Secondary Market
A critical deterrent for mass adoption remains the lack of a mature resale market. Unlike ICE vehicles, which have predictable depreciation and high demand in the used market, the resale value of an EV is heavily tied to ‘invisible variables like battery health and software longevity. Consumers still remain wary of the ‘terminal value risk at the end of ownership cycle.
Price Hikes Taken by the EV Industry During the Year The industry implemented price increases during the year, primarily to counteract inflation in battery and other raw material prices. The higher ex-showroom prices made the initial acquisition cost of electric vehicles more sensitive for ‘fence-sitters.
Phasing Out of Government Subsidies
The subsidy under the PM E-DRIVE scheme, reduced from 10k/kWh per vehicle, was reduced to 5k/ kWh starting April 2025. As the scheme reaches its conclusion, this support is expected to become zero from July 2026. This withdrawal of fiscal support increases the upfront cost for the consumer, further weighing down the TCO advantage against petrol-powered alternatives.
Manufacturing Capacity as a Growth Enabler
Constrained manufacturing capacity across the EV industry remains a key challenge, driven by supply chain disruptions and robust demand outpacing supply. Companies with scalable production capabilities and resilient supply chains are better positioned to capitalise on the sectors growth opportunities. As EV adoption continues to accelerate, manufacturing readiness will be a critical differentiator in translating market demand into sustained growth.
Supply Issues in the EV Industry Due to Heavy Rare Earth Magnet Shortage
Growth in the EV segment was significantly challenged during the reporting period owing to a global shortage of
Heavy Rare Earth Elements (HREE), a critical component for high-efficiency electric motors. This disruption was precipitated in late 2025 by China, which controls over 90% of global HREE production, introducing a stringent export licensing regime. The new mandate required manufacturers to provide exhaustive end-use declarations, extending export clearance timelines from a few days to a protracted 45-60 days. This bottleneck effectively paralysed the ‘just-in-time supply chains upon which Indian EV manufacturers heavily relied on.
The impact was systemic across the sector, forcing several industry players to operate production lines at suboptimal capacity levels or face temporary manufacturing halts during the year. In contrast, Hero MotoCorp demonstrated superior supply chain resilience, maintaining planned production levels through proactive multi-sourcing strategies and the efficient, early procurement of HREE stocks. This strategic foresight ensured that our market commitments remained unaffected despite the broader industry wide production impact.
As the fiscal year progressed, the industry responded by accelerating the adoption of alternative technologies, such as ferrite motors and light rare earth magnets. These strategic pivots reflect the industrys proactive efforts to address magnet dependency and delineate its operations from future external supply risks. By diversifying motor technologies and exploring alternative sourcing corridors, manufacturers are working toward a more resilient and self-reliant ecosystem.
Other Key Barriers to Mass Adoption of EV
Range Anxiety and Limited Range: Affordable models offer limited real-world range; the fear of running out of charge continues to be a key deterrent in the minds of the consumers as it gets compared to the dependable fuel-efficient ICE two-wheelers.
Inadequate Charging Infrastructure: Availability of public charging stations, especially fast-charging options, is limited across India, particularly outside major metropolitan areas. This makes long journeys or spontaneous trips challenging for EV owners.
Battery-related Concerns: The cost of the battery pack continues to be a significant component of the EV. Concerns about battery life, replacement costs and degradation over time continue to impact purchase decisions.
Charging Time: Time required to fully charge an electric two-wheeler is significantly longer than refuelling a petrol scooter or motorcycle, making it inconvenient for users relying on quick turnaround times.
ICE Scooters
Beyond the ongoing electrification of scooters, a defining trend over the last four years has been the outperformance of ICE scooters within the two-wheeler market. The ICE scooter industry expanded at a 15% CAGR from FY 2021-22 to FY 2025-26, higher than the 12% growth of the broader ICE two-wheeler market. Consequently, the share of ICE scooters within the ICE two-wheeler sector rose from 30% in FY 2021-22 to 34% in FY 2025-26, propelled by structural and demographic shifts across India.
Urbanisation and Escalating Traffic Congestion:
As metropolitan regions expand, commuters are increasingly preferring the twist-and-go convenience, agility, and step-through comfort of scooters to navigate dense city gridlocks.
Changing Demographic Profiles: A rapidly rising percentage of women entering the formal workforce has substantially expanded the consumer base for unisex, highly accessible mobility solutions.
Evolving Hyper-Local Ecosystems: The explosion of rapid e-commerce delivery networks and everyday "milk routes" frequent, short-distance household errands has established the scooter as an indispensable utility vehicle for modern Indian homes.
As the segment matures, clear sub-segmentation is emerging. While entry-level 100-110cc scooters maintain a steady volume base, a rising wave of younger, aspirational buyers is driving a visible shift toward premiumisation within the scooters segment. This trend has fostered the rapid expansion of sporty and performance-oriented sub-segments in the 125cc and 150cc 160cc brackets, seamlessly blending daily urban practicality with high-spec connectivity and aggressive styling.
Supply Bottlenecks in the Two-wheeler
Industry
While proactive government measures effectively addressed demand-side challenges at the start of the year, the Indian automotive industry faced significant supply-side headwinds in FY 2025-26. These disruptions were primarily driven by a high dependence on imported critical components, creating substantial risks of production shortfalls across both ICE and EV portfolios.
Heavy Rare Earth Magnet Shortage
Beyond their critical role in EV motors, Heavy Rare Earth
Magnets are essential components in various sensors and switches throughout the automotive ecosystem. While these supply constraints heightened production risks during the year, the industry responded swiftly by accelerating the adoption of alternative technologies.
Recognising the strategic importance of these materials, the Government of India has taken a major step toward self-reliance by notifying a 7,280 crore PLI-style scheme
(the ‘Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets). This initiative aims to establish 6,000 MTPA of domestic integrated capacity, effectively delineating the industry from future global supply shocks.
Hero MotoCorp has successfully mitigated the risk by moving to Light Rare Earth (Non-restricted) & Bonded
Magnets, procuring Sub Assemblies from China and finding alternate supply routes including free zone geographic locations like Vietnam & Europe—before fully switching over to ferrite magnets. These actions coupled with timely intervention in supply chain solutions, ensured that the Company did not lose any production commitment in FY 2025-26.
Memory Chip Shortage
The industry also contended with a severe shortage of ‘foundation chips, such as MOSFETs, transistors, and logic gates, due to a geopolitical standoff involving the chipmaker Nexperia.
The Disruption: A governance and ownership dispute between the Dutch government and Nexperias Chinese parent company led to an export freeze from Chinese assembly plants.
Industry Impact: This bottleneck caused ‘imminent production outages globally, forcing several major Indian and international OEMs to adjust production schedules.
Resilience: The industry is actively addressing this by diversifying sourcing beyond single-region dependencies and seeking alternative ‘standard logic components that offer greater supply security.
Energy Supply Shock & Industrial Fuel Logistics
Toward the close of the fiscal year, the industry faced a significant energy supply shock as domestic gas availability tightened. To manage the crisis, the government prioritised domestic and residential consumption, which led to curtailed gas supplies for industrial applications. This effectively created a shortage across the manufacturing sector, forcing industry players to radically optimise gas usage. This constraint served as a catalyst for the industry to accelerate its transition toward alternative fuel sources and energy-efficient manufacturing processes to ensure operational continuity despite the volatility in traditional fuel logistics.
Outlook
Building on the strong demand momentum observed in the second half of FY 2025-26, the Indian two-wheeler industry enters FY 2026-27 with a positive outlook. Demand remains upbeat in urban centres, while prospects in rural markets continue to improve.
Consequently, the two-wheeler industry is expected to maintain its trajectory of outperforming other segments within the broader automotive landscape.
Within the motorcycle market, the 100cc segment is poised for a steady recovery. This rebound will be propelled by an anticipated resurgence in replacement demand, better consumer affordability, and Hero
MotoCorps ongoing initiatives to drive market growth by scaling up premium options in both the entry-level and deluxe 100cc motorcycles. This will further be supported by intensified customer focus on mileage and fuel economy, as rising fuel costs drive customer preference toward highly efficient platforms. Concurrently, the premium motorcycle segment is projected to maintain its strong upward momentum, backed by favourable GST tailwinds and a steady stream of new product rollouts. Furthermore, the shift toward premiumisation within individual sub-segments, manifested in consumers increasingly choosing top-tier variants, is also set to speed up, driven by higher consumer aspirations and stronger purchasing power.
The Electric Vehicle industry is expected to sustain the robust growth momentum observed post March
2026. This continuation is driven by tailwinds from the West Asia conflict, which has fuelled consumer anxiety regarding higher prices and fuel availability challenges. Consequently, EV penetration within the two-wheeler market is projected to accelerate in FY 2026-27 as supply chain bottlenecks clear and manufacturers expand capacity to meet this heightened demand. Moving beyond products and services, strategic investments will target restructuring the consumer experience across physical and digital touchpoints to align with shifting consumer behaviours and expectations.
While the outlook remains optimistic, the industrys growth trajectory is closely tied to the evolving geopolitical landscape. The aftermath of the West Asia crisis has already led to heightened inflation concerns, as elevated oil prices threaten to dampen overall consumer demand. Furthermore, the sharp post-war surge in commodity prices, driven by both crude price volatility and intensified logistics challenges, presents a significant risk to manufacturing margins. These cost headwinds have led to a selective price pass-on to the end-consumer, which could potentially impact the pace of demand recovery in the near term.
Additionally, the emerging risks of El Nino conditions pose a potential threat to agricultural output; any resulting impact on rural incomes could dampen demand, necessitating close monitoring of weather patterns and their spatial distribution in the coming season.
Hero MotoCorp remains cautiously optimistic of the challenging macroeconomic environment stemming from the West Asia conflict. As the industry leader for 25 consecutive years, we view the current difficult scenario as an opportunity to unlock levers from our core strengths and further bolster our leadership.
Through these challenging times, we will leverage our scale, manufacturing efficiencies, industry-leading financing capabilities; make our communication sharper while continuing to invest in growth avenues. We will aim to insulate our customers from shocks while continuing our capabilities to offer value and meet growing mobility needs.
Expanding the 100/110cc Segment
Throughout FY 2025-26, Hero MotoCorp utilised its massive scale and market dominance in core segments financial engine to fund aggressive pivots into asa high-growth future mobility. The Company fortified its business by expanding the 100/110cc segment, which continued to be the largest contributor to the Indian two-wheeler industry and shifted the brand narrative from basic utility to progress and aspirational. This transformation, spearheaded by the launch of the HF Deluxe Pro, leveraged an unmatched distribution edge in rural India to capture strengthening demand. Hero
MotoCorp redefined premiumisation by elevating models like the Splendor+ XTEC 2.0 and HF Deluxe Pro, making the Entry and Deluxe 100 segments aspirational through a synthesis of classic design and advanced technology, such as LED lighting and digital connectivity.
To address affordability and drive growth, the Company maintained a robust retail finance contribution exceeding 60% of sales volumes through initiatives like the Suvidhaa 2.0 scheme and Digital Retail Finance Platform, which onboarded over 17 financiers to offer loan sanctions in under five minutes. Growth was further propelled by a loyalty programme involving over 18,000 local mechanics who referred more than 2 lakh customers to authorised showrooms, while a seamless service-to-sales integration captured 1.8 lakh interest cases from vehicles older than four years, resulting in 32,000 retail sales in October 2025 alone.
Marketing Campaign Spotlight
Splendor+ (Khushiyon Ka Safar): Revitalised the legacy by celebrating 50 million Hero Splendor+ units, marking a historic milestone for the brand. By rejuvenating the iconic Fill it. Shut it. Forget it. campaign, it paid tribute to the motorcycles unparalleled legacy as Indias most trusted and beloved bike. The campaign became a nationwide hit with the highest viewership of 215 million views within 60 days of launch in September 2025.
HF Deluxe Pro (Naye Indian Ki Deluxe Bike):
The campaign reflected the spirit of a confident and upwardly mobile India, where customers view owning a motorcycle as a mark of self-reliance and growth.
Market Impact
These concerted efforts culminated in the Company achieving its highest-ever market share of 90%+ in the Deluxe 100 segment, with the Splendor+ brand recording highest-ever retails of more than 3.4 million units in FY 2025-26 since its launch in 1994. Similarly, in the Entry motorcycles segment, Hero MotoCorp strengthened its leadership with a market share of 58.9%.
Retail Finance: Bridging Aspirations and Mobility
Retail Finance at Hero MotoCorp effectively bridges the gap between aspirational demand and economic accessibility of our customers. By breaking down the total cost of a two-wheeler into easy monthly payments, we have made personal mobility accessible to everyone—especially for families in rural areas and middle-income groups across India.
During FY 2025-26, the broader financing landscape remained complex due to localised shift toward cash transactions spurred by enhanced purchasing power following GST rate reductions and industry challenges led by portfolio stress and heightened delinquency levels among Non banking financing companies (NBFCs). Despite this, Hero MotoCorp maintained a position of resilience, with our retail finance penetration sustaining a formidable 60%+ level, significantly outperforming industry peers and underscoring our market dominance. Furthermore, we have capitalised on innovative financing avenues, such as No Hypothecation schemes, which now contribute nearly 3% of our total retail finance penetration.
Our financing architecture acts as a potent sales catalyst, effectively neutralising the headwinds of escalating vehicular costs. We have cultivated a robust ecosystem through the seamless integration of our captive finance arm and strategic alliances with over 17 Banks and NBFCs.
Deepening Penetration & Financial Inclusion
NBFCs continue to spearhead the sector, commanding nearly 70% of the market share through aggressive expansion into Tier II and Tier III territories. Hero MotoCorps collaboration with 12 key NBFC partners is central to our mission of deepening financial reach:
Underserved Geographies: We work closely with financial institutions to penetrate credit-starved regions, ensuring mobility is not hindered by a lack of traditional financing infrastructure.
First-Time Borrowers: In collaboration with partner financiers, we have designed bespoke schemes for new-to-credit customers, effectively onboarding them into the formal financial ecosystem and fostering long-term brand loyalty.
Digital Transformation via DigiFin
Modern financing has transcended interest-rate competition, evolving into a digital-first paradigm. Hero MotoCorp leads this evolution through DigiFin, our proprietary Retail Finance Marketplace Platform. This state-of-the-art interface empowers customers and dealers with an end-to-end digital journey characterised by:
Autonomy and Transparency: As a pioneer in the OEM space, DigiFin offers provisional sanctions from a consortium of 17 lenders, providing customers with transparency and the freedom of choice regardless of time or location.
Unparalleled Velocity: Industry-leading Average Loan Sanction Turnaround Time.
Unparalleled Reach: Over 1,000 primary dealers currently benefiting from the platform.
Unparalleled Scale: More than 200,000 loan applications processed in FY 2025 26 alone.
Omni-Channel Financing Solutions
Beyond traditional loans, Hero MotoCorp continuously diversifies its fiscal offerings through lucrative alternative financing solutions. By leveraging credit and debit card offers across Hero MotoCorp touchpoints, we provide a multifaceted suite of payment solutions. These cater to the evolving preferences of the modern Indian consumer, ensuring that every Hero journey begins with financial ease
Increase Market Share in the
Deluxe 125cc motorcycles segment
In FY 2025-26, the Company achieved a significant recovery in the Deluxe 125cc motorcycles segment by aggressively filling untapped white spaces with the launch of the Glamour X and the Xtreme 125R featuring Dual-Channel ABS. The 125cc motorcycle market has grown consistently as it services the rising aspirations of 100/110cc customers and benefits from consumers downtrading from more expensive, larger bikes.
Disruptive innovation served as the cornerstone of this revival, as the Glamour X was positioned as Indias Most Futuristic 125cc bike, utilising segment-first features like
Cruise Control and Ride-by-Wire to revive volumes and gain substantial share from key competitor models in regions such as Bihar and Jharkhand. Simultaneously, the Xtreme 125R successfully engaged a new, young, and aspirational premium customer base, with 97% of buyers under the age of 25. This models reputation for safety and performance was further cemented by the addition of Dual-Channel ABS, contributing 1/3rd of the Xtreme 125R retails by exit of FY 2025-26.
Strategic growth was further guided by a multi-pronged strategy to increase both volumes and market share, specifically focusing on the Sporty 125cc sub-segment. Key strategic priorities included National Expansion to transform Glamour into a pan-India brand beyond its core markets and Youth Cult Building, targeting a 50% volume contribution from riders under 25 for the Xtreme brand. The Company also prioritised Active Lifecycle Management through rigorous Standard Operating Procedure (SOP) adherence for all product interventions and Product Advocacy, focusing on superior quality to reduce CPTV (Complaints Per Thousand Vehicles).
Furthermore, the success of these models extended beyond domestic borders, with the Xtreme 125R achieving significant market share growth in export markets like Bangladesh.
Targeted Brand Campaigns
Hero Glamour X (Future Loves Glamour X): This
360-degree campaign highlighted our technological superiority in the 125cc segment. It showcased the futuristic Glamour X with segment-first innovations, including Cruise Control, Three Ride Modes, and Panic Brake Alert, to elevate brand love and consumer desire.
Hero Xtreme 125R (Live Xtreme): Built around the launch of the Dual Channel ABS variant, this high. decibel campaign features cricket icon Abhishek
Sharma. Spanning TV, Print, OOH, Digital, and Influencer platforms, it positions the machine as the perfect antidote to the ordinary, capturing a bold call to escape monotony, chase adrenaline, and reinforce product superiority.
Market Impact
Driven by these initiatives, Hero MotoCorp concluded the year on a high note, expanding its market share in the Deluxe 125cc segment by 2.4% year-on-year to reach 19% in Q4 FY 2025-26. This performance reflects strong consumer acceptance of the companys new and differentiated launches in the segment.
Increase Share in ICE scooters
In the scooter segment, Hero MotoCorp pursued a multi-pronged growth strategy in FY 2025-26, focusing on premiumisation, sub-segment expansion, and deep community engagement. The strategy aimed to address white spaces in the portfolio to capture demand across both Sporty and Commuter categories in the 110cc and 125cc segments. Recognising that the 110cc segment is primarily driven by Commuter models while the 125cc segment is led by Sporty variants, the Company prioritised product diversification. This expansion covered the distinct sub-segments by aligning with specific Key
Buying Factors (KBF) and introducing best-in-class and first-in-segment features.
Sporty Segment: Performance Meets
Innovation
We expanded our footprint in the high-performance category with two landmark launches designed for those who prioritise agility and modern aesthetics.
XOOM 125: Engineered for Status & Modernity Seekers, the XOOM 125 set a new benchmark for speed with a fastest-in-class acceleration of 0 60 km/h in 7.6 seconds. It features segment-first 14-inch wheels with wider tires for superior stability, alongside an Advanced LED Light Package featuring sequential winkers and an illuminated start button.
XOOM 160: Positioned as the SUV of Scooters, this flagship model redefined the premium adventure category. Beyond its Smart Key technology, it offers unrivalled ride comfort via twin rear suspension and best-in-class 14-inch wheels with block-pattern tires. Its performance credentials were solidified by setting a record in the Indian Book of Records for crossing 32 mountain passes in just seven days.
Commuter Scooter Segment: Elevating Everyday Utility
We augmented our presence in the commuter scooter space by enhancing the Destini brand, focusing on durability, fuel efficiency, and ergonomic design.
Destini 110: Addressing the core KBFs of Mileage and Durability, the Destini 110 delivers a best-in-segment mileage of 56 km per litre. It prioritises rider convenience with the longest seat in its class (785mm) and spacious legroom, supported by 12/12-inch wheels for a balanced ride.
Destini 125: Rebranded as the ultimate Urban Commuter, the Destini 125 blends high mileage with sophisticated design. To enhance the premium commuting experience, it features auto-cancel winkers, integrated DRLs and an illuminated start switch.
Targeted Marketing Campaign
Destini 125 (Hero Ka Scooter, Scooter Ka Hero):
Featuring legendary filmmaker S.S. Rajamouli, the ad film draws from Rajamoulis signature style: epic scale, magnificent visuals, and cinematic grandeur, positioning the Hero Destini 125 as the ultimate Hero of the scooter segment - Hero Ka Scooter, Scooter Ka Hero
Hero Pleasure+ (Why Should Boys Have All the Fun?): Re-energising our bond with young female riders.
Through the revival of the iconic Why Should Boys Have All the Fun? campaign, we successfully positioned the Pleasure+ as a stylish and empowering choice for the modern lifestyle consumer.
Xoom 125 (Get. Set. Xoom Campaign): Launched a high-profile marketing campaign featuring youth icon Ishaan Khatter placed at the centre of the IPL season, maximising mainstream visibility through targeted TVCs across Digital and Cable TV and strategic placements in Post-Show and Highlights segments.
Market Impact
Through this portfolio expansion across three distinct sub-segments and targeted marketing campaigns, Hero MotoCorp achieved a market share of 6.0% in FY 2025-26, up from 5.5% in FY 2024-25.
Upgradation of Channel Network
We continued our Hero 2.0 channel network upgrades to provide an enhanced, premium experience characterised by a contemporary design and a more engaging customer environment, including a modernised after-sales network. As of FY 2025-26 end, we have more than 1,400 Hero 2.0 stores across the country, with 95% coverage in metro cities. The effectiveness of this initiative is confirmed by significantly higher NPS scores at Hero 2.0 outlets compared to legacy stores.
Further, in FY 2025-26, we achieved the highest secondary network growth in the history of Hero MotoCorp with 823 new appointments (240 activated), bringing our total base to over 6,100 touchpoints. We successfully scaled this network while optimising capital expenditure on visual identity elements, thereby reducing infrastructure costs for partners while maintaining our brand ethos. This allowed for the strategic reallocation of funds toward working capital.
To drive rapid penetration, we introduced the 1S Outlet (Sales Only) format, specifically designed for multi-brand outlets (MBOs), low-potential markets, and challenging hilly terrains where traditional setups are less viable.
Global Business: Moving with Purpose
Hero MotoCorp is accelerating its journey from a regional leader to a definitive global force in mobility. Leveraging over four decades of engineering excellence, we are expanding our reach from local village roads to the worlds most demanding highways—delivering products that seamlessly combine uncompromising dependability with contemporary, expressive design. We build for the global doers the everyday heroes who power economic progress across continents.
We continued our strategic focus on top 10 identified markets while concurrently nurturing growth in other international regions and expanding in new geographies. Our key global focus markets include Bangladesh, Colombia, Turkiye, Mexico, Nepal, Guatemala, Nigeria, the Democratic Republic of Congo (DRC), Philippines and Sri Lanka.
FY 2025-26 marked a year of decisive transformation and accelerated growth for Hero MotoCorps Global Business achieving record dispatches of 402,786 units, a 40% YoY increase. This was led by strategic market prioritisation, sharper portfolio alignment, and disciplined execution, which translated into meaningful expansion across key geographies. Our performance reflects a focused commitment to market-fit products, deeper customer engagement, and resilient distribution partnerships.
Performance across key geographies:
Bangladesh: Strengthening Leadership
In Bangladesh, we delivered a significant 48% growth in dispatches, supported by a sharp product strategy and focused execution. The Xtreme 125R has proven to be a compelling market fit, successfully attracting younger riders and enhancing brand salience. Sustained marketing investments and retail activation further strengthened customer preference, enabling us to consolidate market leadership during the fiscal year.
Colombia: Youth-led Acceleration
Colombia emerged as a standout growth engine, recording a remarkable 98% increase in dispatches. The introduction of our youth-centric portfolio, spearheaded by the Hunk and Xoom series which resonated strongly with evolving consumer aspirations. By combining aspirational design with dependable performance, we strengthened our positioning as a preferred mobility partner in Colombias dynamic two-wheeler landscape. Consequently, our market share in Colombia nearly doubled, climbing to approximately ~8%.
Nepal: Riding with Market-fit Portfolio
Nepal remained a strategically important market within
South Asia, supported by steady recovery in demand and a pronounced shift towards the fast-growing 125cc motorcycle segment. Hero MotoCorp capitalised on this momentum with the strong performance of the Xtreme 125R, which continues to gain traction among young, aspirational riders seeking a differentiated blend of sporty design, performance and value.
In scooters, portfolio expansion through the launch of the Xoom 110 has strengthened our presence in urban mobility, while the planned introduction of the Xoom 125 is expected to further enhance competitiveness in the premium scooter category.
Additionally, Nepals unique terrain and growing adventure preference provide a natural advantage in the on-off segment, where the XPulse 200 continues to reinforce Hero MotoCorps differentiated positioning.
Sri Lanka: A Confident Comeback
Following the lifting of import restrictions, we re-entered Sri Lanka with agility and intent. A market-aligned portfolio-led by HF Deluxe, Hunk 125R, Xtreme 160R, and Xoom 125 enabled us to swiftly regain a 13%+ market share. Our resurgence was powered by a disciplined customer-first strategy, rapid network reactivation, and strong channel engagement, rebuilding trust while reinforcing long-term brand equity.
Nigeria: Building Resilience at the Core
Our approach in Nigeria centres on maximising rider earning potential through superior value and operational efficiency. We ecosystem, reinforcing uptime and long-term loyalty. Through technical capability-building, on-ground activations, and community-driven engagement, we established trusted last-mile infrastructure, laying a robust foundation for sustainedgrowthinthecomingfiscal year.
Brazil Operations and Future Readiness
Strengthening Hero MotoCorps commitment to Latin
America, we formally incorporated a wholly-owned subsidiary and branch office in Brazil. This entity is currently establishing the necessary infrastructure and supply chain networks, with full-scale commercial operations on track to commence in FY 2026-27.
Strategic Entry into Europe
HMCL officially commenced operations in the United Kingdom and European Union focusing on Italy, Spain, and France. To meet the demands of these markets, Hero MotoCorp introduced a Euro 5+ compliant portfolio. This was led by the premium products: the Hunk 440, tailored for European performance standards, and the flagship adventure motorcycles, the XPulse 200 4V & XPulse Pro.
During FY 2025-26, the Company successfully reimagined its premium presence by shifting from Mass to Cult and Aspirational positioning through the following four focus areas:
Build Portfolio filled portfolio gaps by fast- TheCompanyaggressively tracking the introduction of high-performance models in higher displacement white spaces. Key launches included the HD X440T and the Xtreme 250R, with the latter setting a new class benchmark by reaching 0 60 km/h in just 3.25 seconds. This expansion built upon the technological advancements demonstrated by prior launches such as the Karizma XMR and XPulse 210.
Focused Marketing
Marketing initiatives were strategically amplified to build premium imagery through lifestyle integration, performance, and technological attributes. Utilising the established 4C framework Culture, Collaboration, Community engagement, and Content creation the
Company strengthened its brands to resonate with a distinct consumer demographic. Sophisticated digital marketing strategies, including targeted online advertising and compelling digital content, were implemented to engage tech-savvy contemporary customers. Additionally, active engagement with the motorcycle riding community established an influential presence in the greater than 200cc segment, fostering brand advocacy among performance enthusiasts.
Strategic Alliances: Harley-Davidson
During FY 2025-26, Hero MotoCorp in collaboration with Harley-Davidson launched the all-new H-D X440T, drawing inspiration from the iconic Harley-Davidson Sportster
XR1200. Guided by the theme ‘Beyond the Everyday, the launch presented a modern interpretation of Harley-
Davidsons heritage defined by freedom, confidence, and the pursuit of ones own path. The H-D X440T brought with it a feature-rich package, including Ride by Wire, Road and Rain modes, Rear Switchable ABS and Traction Control, and a Panic Braking Alert System.
Another key moment for the brand was the H-D X440 association with the blockbuster film ‘Saiyaara, which went on to achieve national and global success. This strategic integration drove a significant rise in brand awareness and market interest, reflected in multifold growth in search trends, increased traffic across leading automobile aggregator platforms, and a sharp rise in customer enquiries at Harley-Davidson dealerships nationwide.
A further notable milestone was the introduction of the Harley-Davidson CVO Road Glide and CVO Street Glide in India, generating widespread coverage across leading automotive platforms, including TopGear, OverDrive, Autocar, and Car&Bike. The year also marked the launch of the H-D X merchandise store on Amazon.
Roll Out of Premia Stores
The Hero Premia network served as the physical manifestation of the Companys premium ambition, focusing on experiential selling through setups that deliver Phygital customer journeys. These specialised retail establishments fast-tracked their rollout to reach 130 locations across 115 cities as of March 2026, utilising contemporary aesthetics and integrated digital technologies to optimise engagement. Within these stores, distinct zones were allocated for Hero MotoCorps high-end models, Harley-Davidson motorcycles, and VIDA electric two-wheelers to cultivate a unique, unified brand experience. The Company further bolstered this network by striving for elite after-sales standards, targeting a Customer Satisfaction Index (CSI) of 90+ and same-day delivery for its premium clientele.
VIDA was founded with the purpose of driving a movement that prioritises both people and the planet, redefining mobility as a force for good. VIDA meaning life in Spanish, aims to bring cleaner air and smarter journeys to every corner of the world by making sustainable mobility widely accessible and highly affordable. Backed by the legacy of Hero MotoCorp, the brand is committed to delivering a conscious, connected ecosystem that empowers meaningful progress and a better tomorrow for everyone.
In FY 2025-26, VIDA strategically focused on product innovation, brand building, and ecosystem development to drive both market share expansion and industry growth.
These efforts resulted in record-breaking retails—growing approximately 190% YoY and a significant increase in VAHAN market share from 4.2% to 10.2% in FY 2025-26.
Launched VIDA VX2 with Industry-first Battery-as-a-Service feature
The market share gains in VIDA in FY 2025-26 were primarily driven by the strategic launch of the VIDA VX2 EVOOTER, introduced on the birth anniversary of our Founder and Chairman Emeritus, Dr. Brijmohan Lall Munjal. Joining our existing VIDA V2 series, the VX2 competes in the family scooter segment and currently has three variants VX2 Go (2.2kWh), VX2 Go (3.4kWh), and VX2 Plus (3.4kWh). The price laddering ensured a strong presence across all EV industry segments, including the mass, mainstream, and premium categories. Maintaining a differentiated industry offering, the VX2 features removable batteries that allow users to charge their vehicle anywhere using a standard 5A plug point. Additionally, the VX2 pioneered the Battery-as-a-Service (BaaS) feature, a disruptive pay-per-kilometre subscription model that enables the separate ownership of the chassis and the battery. This initiative directly addresses the primary barriers to EV adoption by significantly lowering high upfront costs of owning an EV scooter and eliminating concerns regarding long-term battery replacement.
Beyond its functional benefits, the BaaS model served as a powerful marketing tool that successfully increased customer footfalls and improved conversion rates across our retail stores.
Furthermore, the provision of a comprehensive 5-year or 50,000 km warranty, combined with access to the countrys largest charging network of over 5,900 points as of March 2026, was specifically aimed at solving other key impediments to EV adoption.
Marketing Momentum: Driving Brand Resonance and Reach
Our marketing strategy for VIDA was centred on high-impact campaigns and strategic cultural integrations to drive mass-market awareness. We launched a disruptive 360-degree campaign for the VX2 EVOOTER featuring Bollywood icons Ranbir Kapoor and Anil Kapoor, which effectively communicated the blend of EV intelligence and scooter practicality. This was followed by a high-visibility showcase on premier television properties, including Kaun Banega Crorepati (KBC) and Indias Got Talent, embedding VIDA into the heart of Indian household entertainment. To further solidify our presence in the sports and lifestyle arena, VIDA partnered as a sponsor for the IPL with Kolkata Knight Riders (KKR). This association was amplified through the high-energy VIDA VAKA VOOM campaign, leveraging the scale of professional cricket to accelerate brand recall and position VIDA as a vibrant, mainstream choice for the next generation of riders. Collectively, these initiatives led to a significant lift across all key brand KPIs, driving higher levels of awareness, consideration, and preference among consumers.
Emerging Mobility & Off-Road Exploration
VIDA also entered the off-roading segment with the debut of the DIRT.E K3, the first product in its newly created off-road line, DIRT.E. Guided by the tagline Wild beyond the Ride, this electric vehicle is engineered for young riders aged 4 to 10 years. It brings a fresh approach to early motorcycling by combining electric performance with a unique, size-adjustable platform that transforms across Small, Medium, and Large configurations effortlessly using a single tool. This three-stage adjustable system addresses a long-standing gap in young riders motorcycles, which are often quickly outgrown. Conceptualised, designed, and developed at the Hero Tech Center, Germany (HTCG) and the Centre for Innovation and Technology (CIT) in Jaipur, production of the vehicle takes place at the green manufacturing facility in Tirupati, Andhra Pradesh. The DIRT.E K3 is powered by a 350W continuous/500W peak motor paired with a 360Wh removable battery that charges from 0 to 100% in approximately three hours. Safety is built into every detail, incorporating app-enabled parental controls to manage speed limits, a young rider-scaled brake lever, a single rear hydraulic disc brake designed to reduce front-wheel washout, and a magnetic lanyard-based kill switch.
Underscoring its pioneering design and engineering excellence on the global stage, the motorcycle has been internationally recognised with the Red Dot Design Award 2025 and the CES Innovation Award Honoree 2026.
Scale-up PAM business
The Parts, Accessories and Merchandise business remains a cornerstone of our financial health and customer loyalty strategy. In FY 2025-26, this segment achieved a landmark revenue of 6,147 crore, representing a 5% growth YoY.
This success is rooted in our Customer-First philosophy—identifying underserved needs and ensuring our products are available exactly where and when our customers require them.
Deepening Market Penetration
Rural Connectivity: Recognising untapped potential in rural landscapes, we extended our distribution network down to the Taluka level. This hyper-local approach ensures that genuine parts are accessible even in the remotest regions.
Portfolio Breadth: Our aftermarket ecosystem now provides a 360-degree solution, ranging from Engine Oils and Bike Care products to Tyres and Batteries.
Strategic Innovation: Introducing PROPARTS
To capture the high-potential out-of-warranty segment, we launched PROPARTS a strategic second line of genuine parts. Designed specifically for vehicles older than five years, PROPARTS offers a value-plus proposition. It provides price-sensitive owners with a reliable, high-quality alternative to unorganised market spares, ensuring that older Hero motorcycles continue to perform with the integrity of genuine engineering at a more accessible price point.
Infrastructure and Future-proofing
GPC 1.0 (Neemrana): Our Global Parts Center remains a technological marvel, managing 30,000 SKUs with peak operational efficiency through advanced automation.
GPC 2.0 (Tirupati): To bolster our Southern presence, we have committed a strategic investment of 770 crore over the next two years to establish a state-of-the-art facility in Andhra Pradesh. This GPC 2.0 will redefine our logistical agility and drastically reduce turnaround times for our dealers and customers, while simultaneously expanding our structural capacity to seamlessly meet long-term regional demand growth.
Exploring Product Adjacencies: Investment in Euler Motors
In a major step forward for our long-term vision of leading sustainable mobility across formats, Hero MotoCorp deepened its strategic partnership with Euler Motors in FY 2025-26 by deploying an additional 210 crore. This capital infusion follows our initial investment of 510 crore (which secured a 34.1% stake) and successfully elevates our equity shareholding.
In FY 2025-26, Euler extended its product portfolio into the four-wheeler (4W) Light and Small Commercial Vehicle segments with the launch of the Storm EV and Turbo EV 1000. Featuring segment-first technology and enhanced payload capacities, these new lineups are purpose-built to transform both intra-city and inter-city logistics.
This portfolio expansion acted as a powerful growth catalyst, driving an 81% YoY surge in combined 3W and 4W sales volumes to 7,576 units in FY 2025-26. Supported by strong market adoption, Euler Motors effectively doubled its top-line performance, with revenue surging to 402 crore in FY 2025-26 from 191 crore in the previous fiscal year.
Surge
During FY 2025-26, our in-house start-up Surge EV marked a pivotal transition from engineering validation to market-ready execution. Our first product under the platform, Surge S32, a first-of-its-kind convertible vehicle that transforms from an electric two-wheeler to a three-wheeler, received type approval from the Automotive Research Association of India (ARAI). It is the first in India to be certified under the L2-5 category by the Ministry of Road Transport & Highways (MoRTH), marking a significant step from validation to market readiness.
Subsequently, we optimised assembly processes at our manufacturing facility, scaling our specialised team to support the upcoming commercial ramp-up. Our first Surge S32 vehicle was produced in our plant in May 2026. Further, we have signed five MOUs with leading logistics providers in the country to integrate the platform into their fleets.
Freedo
Freedo rentals, also our in-house startup incubated under the Hero Hatch innovation platform. Designed as an accessible, asset-light alternative to vehicle ownership, Freedo addresses rising urban congestion and high ownership costs by offering flexible, user-centric two-wheeler rentals and subscriptions. This innovative venture serves as a strategic lever for Hero MotoCorp, creating a highly scalable ecosystem that expands our market reach and drives incremental revenue from emerging, high-potential digital business streams. In FY 2025-26, Freedo achieved exponential operational growth and significantly expanded its market presence.
The platform successfully doubled its geographic footprint to 28 cities and expanded its active fleet size by 85% year-on-year to cross 10,000+ vehicles. This rapid physical scaling was mirrored by a massive surge in digital adoption, as mobile application downloads more than doubled to cross 1.5 million compared to FY 2024-25, validating Freedos strong product-market fit and robust growth trajectory.
Digitalisation
In FY 2025–26, Hero MotoCorp achieved a structural shift in its technological landscape, transitioning from digital as a support function to a digital-first engine powering our global expansion and operational excellence. By consolidating fragmented touchpoints into a unified, cloud-first ecosystem, we have harmonised the experience for customers, dealers, and employees alike.
Commercial Excellence and Customer Centricity
The year was defined by a significant leap in commercial efficiency. By deploying AI-driven lead propensity models, we successfully increased our lead conversion rates from 10% to 15%. Simultaneously, targeted Machine Learning (ML) marketing campaigns transformed our customer relationships from transactional to relational, driving repeat purchase growth from 3% to 12%.
Our Phygital approach bridged the gap between online convenience and offline retail. Historically manual processes, such as Roadside Assistance (RSA) and Harley Owners Group (HOG) renewals, were migrated to 100% digital journeys, ensuring instantaneous service for our riders.
Manufacturing and R&D: The Single Source of Truth
On the shop floor, the transformation moved from retrospective reviews to real-time control. The deployment of Smart Cells and AI-assisted quality inspections enabled in-shift monitoring and standardised checks across our facilities.
In R&D, we unlocked borderless innovation. By migrating our Product Lifecycle Management (PLM) stack to a cloud-based SaaS model, our engineering teams in
Germany, Jaipur, and Gurugram now collaborate on a Single Source of Truth in real-time. This was supported by a 22% boost in processing speeds through the strategic repatriation of High-Performance Computing (HPC) to on-premise infrastructure.
Operational Efficiency and Cost Optimisation
Data-driven decision-making scaled unprecedentedly this year, with analytics usage growing 3x. Despite this massive increase in consumption, we achieved a 30% reduction in data processing costs through the strategic optimisation of our cloud infrastructure. In our supply chain, the Cost It
Right digital platform now allows for real-time, zero-based costing simulations, providing SKU-level visibility into raw material and currency fluctuations.
Security, Privacy and Ethical AI
As our digital footprint expanded, so did our commitment to security. HMCL achieved 100% ISO 27001:2022 certification across all 12 facilities. Our 24/7 Security Operations Center (SOC) maintained a zero Priority 1 (P1) incident record, with a Mean Time to Response (MTTR) of 1.51 hours five times faster than the industry benchmark. Looking ahead, we have institutionalised an Ethical AI and Data Privacy framework. By prioritising explainable AI and rigorous compliance with the DPDP Act and GDPR, we are mitigating risks related to algorithmic bias and data leakage. This resilient foundation ensures that as we scale, we do so with integrity, transparency, and a relentless focus on a high-performance, AI-led future.
Your Company is proactively advancing its strategic blueprint to build a "Future-fit Organisation." By institutionalising a holistic framework across financial, people, cultural, and process ecosystems, we are ensuring sustainable value creation and long-term organisational readiness.
Financially Fit
We are committed to maintaining robust margins, both overall and at the business unit level, while concurrently making strategic investments to facilitate sustained growth. To achieve this, we focus on driving the right margin shape across all Strategic Business Units (SBUs) including Global Business (GB), Domestic, Electric Vehicles (EV), Premium (PAM), and New Streams ensuring each unit delivers profitable and resilient performance.
People Fit
To support our expanding ecosystem, we are establishing an efficient, agile Operating Model characterised by a horizontally structured, role-based framework with dedicated Centres of Excellence (CoE) and empowered, accountable BUs.
Crucially, Hero MotoCorp has prioritised the advancement of internal candidates to leadership positions, while simultaneously cultivating future leaders through robust talent pipeline and succession planning initiatives across various organisation layers. This is complemented by strategically strengthening our talent capabilities in future-critical domains and remaining open to onboarding external talent to further augment our leadership capabilities.
Culture Fit
Culture remains the bedrock of our transformation.
We are fostering a value-based, inclusive, fluid, and responsive workplace designed to position your Company as a preferred employer of choice across sectors. This evolutionary mindset embeds First Time Right quality and cutting-edge Innovation directly into our core organisational DNA.
Process Fit
Hero MotoCorp is strengthening its process capabilities across various critical domains, including product development, quality management, digital and AI landscape. To achieve this, we are systematically executing against key operational imperatives:
Lean & Digitised Operations: Implementing lean methodologies to digitise end-to-end organisational workflows.
Resilient Supply Chain: Building an innovative, data-driven, and highly responsive supply chain ecosystem.
Accelerated Time-to-Market: Significantly compressing product development cycle times to stay ahead of market dynamics
ESG (Environmental, Social, and Governance) has evolved from a moral obligation into a core strategic requirement. It is the primary lens through which investors, regulators, and consumers judge a companys long-term viability.
Global Importance: ESG is the universal standard
(Triple Bottom Line). Poor ESG scores risk divestment from major investors. Regulations like the EUs CSRD demand transparency, increasing climate litigation risk and requiring global supply chain compliance.
Importance in India: India mandates strict ESG disclosures. The SEBI BRSR Core requires assurance for top listed companies. Meeting international ESG standards is vital for attracting Foreign direct investments and the Make in India initiative. New
Companies Act amendments tighten CSR and focus on governance/diversity.
Automobile Industry: As a major CO2 contributor, the sector faces intense scrutiny. The shift to EVs requires reporting cradle-to-grave carbon footprint, including battery manufacturing. Focus is on Circular Economy and Product Recyclability (recovering lithium, cobalt).
Companies must ensure ethical value chain including human rights and responsible sourcing.
Specific Impact: In FY 2025-26, Hero MotoCorp the worlds largest manufacturer of motorcycles and scooters reached a pivotal juncture in its Re-imagining Mobility mission. The Company had completed 25 consecutive years of global market leadership, a milestone it leveraged to accelerate its transition toward a sustainable and technology-driven future.
Environmental: The Transition to Green Mobility: Hero
MotoCorps FY 2025-26 environmental strategy includes Sustainable mobility and sustainable operations.
Sustainable Mobility: VIDAs market share grew from 4.2% to 10.2% in FY 2025-26, driven by the launch of VIDA VX2. The DIRT.E K3, a size-adaptive electric vehicle, won the CES 2026 Innovation Award. The Class-Shifting Surge S32, developed by Hero Hatchs Surge Future Mobility, progressed from concept to regulatory pioneer, central to the Re-imagining Mobility strategy.
Sustainable Operations: The Company aims for carbon-neutral operations by 2030, achieving 32% Renewable energy share and 45% Carbon Neutrality in FY 2025-26. Sustained the 500% Water positivity and 100% Zero Waste to Landfill operations. Life Cycle Assessments were completed for 80% of products (by sales value).
Social: Hero MotoCorps FY 2025-26 social focus centered on rural empowerment and road safety. It boosted financial inclusion by providing easier credit access, including specialised financing for rural women entrepreneurs. Road safety was promoted via the Be a Safe Hero campaign, utilising digital videos and training centres. The company introduced Hero.Life built on the philosophy of People @ Centre, represents the complete employee journey, fostering a human-centric and growth-oriented culture that strengthens emotional connections and ensures ‘One Hero experience. Aggressively targeting 30% female representation by 2030, Hero MotoCorp supports DEI through SheLeads and fostering inclusion via sensitisation workshops, earning consecutive recognition for workplace culture.
Governance: FY 2025-26 was a year of external validation for Hero MotoCorps corporate governance and sustainability reporting. Hero MotoCorp achieved significant recognition and innovation in the past year, being the sole Indian two-wheeler on the Dow Jones
Sustainability Index (DJSI) for the second year. Further solidifying its ESG standing, the Company was named an ESG Leader among automotive companies by NSE
Sustainability Ratings & Analytics Limited in early 2026. The Company closed the year not just as a sales leader, but as a recognised benchmark for ESG integration in the automotive sector.
Ignite a Culture of Racing:
A Landmark Year for Hero MotoSports
FY 2025-26 marked a and domestic success for Hero MotoSports. On the international stage, the team solidified its position amongst the worlds elite rally teams by securing a historic, remarkable double top-10 finish at the Dakar Rally 2026. Following this, Hero MotoSports ended the FIM
World Rally-Raid Championship on a strong note with a prestigious 3rd place finish (Manufacturer Ranking) for the season, with Nacho Cornejo finishing in 6 th place and Ross
Branch finishing in 9th place in the World Championship standings. Further reinforcing this global success, team Hero secured a strong Runner-Up position in the FIM Rally-Raid World Cup (Rally2) standings. On Indian soil, the team delivered a standout performance across the domestic circuit. Team celebrated a clean sweep at the Indian National Rally Sprint Championship
(INRSC) 2025 Grand Finale, delivering a dominant performance with brilliant category victories for Somyya Chaudhary in the Womens Class (up to 260cc) and Kathiroli across Group B and Group D (165 260cc).
In the Indian National Rally Championship (INRC). The team maintained strong consistency with key wins at Chikkamagaluru, wrapping up the season as Runner-Ups in two categories with Karan Kumar in Group B (up to 260cc) and Somyya Chaudhary in Womens class.
Read more page86-87 .
Hero For Startups
Driven by a shared vision to reshape the global automotive landscape, the Hero Innovation Vertical experienced a chapter of global milestone year of strategic expansion. A cornerstone of this initiative is the Hero For Startups (HFS) programme, which established itself as a premier destination for industrial innovation by reviewing over 492 applications. The programmes inaugural cohort selected four high-impact startups tasked with engineering critical solutions for infrastructure and technical challenges within the EV ecosystem. This corporate-led momentum is mirrored across our external, internal, and partner ecosystems to cultivate multi-generational innovation pipelines. Celebrating a decade of academia-led engagement, Season 10 of the Hero Campus Challenge (HCC) witnessed a record-breaking 200,000+ registrations from over 8,000 campuses a staggering 106% increase over last year, further solidifying Hero MotoCorp as an aspirational employer of choice. Internally, the Idea Contest acted as a powerful engine for bottom-up innovation, attracting over 1,400 ideas from the employees with top solutions driving advancements in Rider Safety, Customer Experience, and Manufacturing Quality while boosting inclusivity and diversity participation from 6% to 23%. This culture of co-creation was extended to the next generation through the Hero Young Innovators Programme
(YIP) across 27 schools, and to the frontline via the Hero Dealer Innovation Community (HIDC), which scaled intensive field engagements and multiple in-person residency visits to ensure a premium, seamless, and integrated customer journey.
Customer Outreach Programmes
The Company significantly stepped up its consumer outreach by executing high-impact marketing campaigns to support new launches and refreshes this fiscal year. This aspiration-led strategy seamlessly engaged contemporary youth and digitally native audiences, making
Hero MotoCorp the most visible brand in the two-wheeler category with an industry-leading share of voice. Key digital, experiential, and community-driven highlights from the year include:
High-Impact Media & Sports Properties: Capitalised on massive cricket viewership through robust on-ground and on-air partnerships with the Mens Asia Cup and Mens T20 World Cup. Additionally, a digital integration with Kaun Banega Crorepatis Fastest Finger First segment successfully cemented the attributes of speed and agility for the Hero Xtreme 125R.
GenAI & Digital Ecosystem Transformation: Deployed an industry-first, WhatsApp-integrated GenAI platform enabling dealers to create localised, brand-compliant marketing assets. We also launched the all-new Integrated Hero Customer App featuring GenAI manuals, boosting digital bookings by 35% as part of our Hero 2.0 connected ownership strategy.
Targeted Influencer & Corporate Outreach: Cultivated a dedicated Creator Ecosystem with 250+ specialised influencers, generating over 350 million views to reach digital-first consumers. On-ground demand was further accelerated by taking premium test rides directly to professionals across 40+ corporate parks in 8 major metros.
Premium Communities & Purpose-led Activation:
Expanded our premium XClan rider network to over 3,600 active members, institutionalising 360-degree engagement via Premia outlets. This was supported by unique experiential initiatives: the Xpulse Hero Prayers for Safety campaign, which comprised of distribution of first-aid kits styled as prayer flags in the Himalayas, and the Hero Tiranga Trails, a civil-military platform promoting border tourism and honouring the armed forces.
Financial Performance
| Particulars | FY 2025-26 | FY 2024-25 |
| Motorcycles and Scooters Sold | 64.69 | 58.99 |
| (No. of units in lakhs) | ||
| Income | ||
| - Revenue from Operations | 46,830 | 40,756 |
| - Other Income | 1,041 | 1,056 |
| Total Income | 47,871 | 41,812 |
| Expenses | ||
| - Cost of Materials Consumed & | 31,563 | 27,069 |
| Changes in Inventories | ||
| - Employee Benefit Expenses | 2,711 | 2,595 |
| - Other Expenses | 6,626 | 6,021 |
| Total expenses | 40,899 | 35,684 |
| Profit Before Tax | 6,972 | 6,128 |
| Tax Expense | 1,704 | 1,518 |
| Profit After Tax | 5,268 | 4,610 |
| Other Comprehensive Income | (16) | (12) |
| Total Comprehensive Income | 5,252 | 4,598 |
| Earning per Equity Share on | 263 | 231 |
| Profit After Tax |
Key Financial Ratios
| Particulars | FY 2025-26 | FY 2024-25 |
| Trade Receivables Turnover Ratio | 19.00 | 16.28 |
| Inventory Turnover Ratio | 19.04 | 18.66 |
| Interest Coverage Ratio | 316.91 | 324.20 |
| Current Ratio | 1.98 | 1.87 |
| Debt Equity Ratio | 0.01 | 0.01 |
| Operating Profit Margin (%) | 12.97 | 12.49 |
| Net Profit Margin (%) | 11.00 | 11.03 |
| Return On Equity (%) | 25.46 | 24.40 |
COMMENTARY
Trade Receivables Turnover Ratio: The debtor turnover ratio increased from 16.28 times in FY 2024-25 to 19.00 times in FY 2025-26. This improvement is primarily attributable to lower receivables outstanding in relation to revenue from operations.
Inventory Turnover Ratio: The inventory turnover ratio has witnessed an increase from 18.66 times in FY 2024-25 to 19.04 times in FY 2025-26. This improvement in inventory turnover is mainly on account of lower inventory levels in relation to cost of goods sold.
Interest Coverage Ratio: The interest coverage ratio has marginally decreased by 2.25% primarily due to higher interest cost increase in comparison to profit growth.
Current Ratio: The current ratio has increased from 1.87 times to 1.98 times, which has seen as positive change on account of a higher increase in current assets. The current ratio is a measure of a companys ability to meet its short-term obligations using its current assets.
Operating Profit Margin (%): Operating profit margin for the year has increase from 12.49% to 12.97%. This improvement is primarily due to better realisation, effective cost control & value engineering.
Net Profit Ratio/Margin (%): The Company maintained a stable net profit margin of 11.00%, compared with 11.03% in the previous year, supported by healthy operating margins and robust other income.
Return on Net Equity/Net Worth (%): The increase in profits has resulted in a notable improvement in the Return on Net
Worth, which has increased from 24.40% to 25.46%. This improvement highlights our increased efficiency in utilising the Companys resources to generate profits.
Risk Management
Our Enterprise Risk Management (ERM) framework is an essential pillar of our operational resilience, safeguarding Hero MotoCorp against external headwinds while minimising internal risks through a robust, multi-tiered governance structure. At the execution level, dedicated
Functional Risk SPOCs work closely with the Central Risk Team to manage and mitigate functional vulnerabilities. Strategic direction is provided by the Risk Steering
Committee (Risk SteerCo), comprising CXOs, provides strategic direction, while the Risk Management Committee (RMC), a specialised sub-committee of the Board of Directors, maintains ultimate oversight and governance.
By consistently providing the governing committees with proactive risk assessments, trend data, and targeted mitigations, we continuously enhance our Business
Continuity Planning (BCP) capabilities. This allows us to effectively navigate complex challenges, ensure uninterrupted operations, protect stakeholder trust, and solidify market confidence in our brand.
Read more Page170 .
Internal Controls
The Company maintains a robust, digitally advanced internal controls framework validated by the Audit and
Assurance function, which provides independent oversight to the Board and strategic, forward-looking risk counsel to management. Formulated in tandem with management and statutory requirements, our audit plan targets high-priority risks aligned with corporate objectives, with key findings and action plans reviewed quarterly by the Audit Committee. By extensively embedding cutting-edge technologies like data analytics, artificial intelligence, and machine learning, the Company has transitioned to continuous, real-time automated monitoring, establishing a highly pre-emptive and data-driven risk management architecture across the organisation.
Cost Savings
Our teams continuously drive operational excellence and margin resilience through our flagship cost-transformation engine, LEAP. Under this structured framework, we have intensified our focus on streamlining manufacturing workflows, lowering variable production costs by advancing tooling performance, curbing consumable waste and optimising raw material yields across our facilities. Concurrently, our manufacturing plants have aggressively adopted sustainability-driven initiatives to sharpen focus on reducing energy consumption.
By scaling these design-to-cost and structural efficiency measures, the LEAP programme resulted in cost-savings of over 534 crore in FY 2025-26, translating directly into a ~1.1% as percentage of revenue from operations.
Human Resources: Building a Future-ready Organisation
Guided by our People@Center philosophy, Hero MotoCorp transitioned its human capital strategy into Hero.Life, an integrated lifecycle framework that unifies the employee journey across five strategic pillars: Hero.Embark, Hero. Belong, Hero.Learn, Hero.Thrive, and Hero.Tribe.
Hero.Embark focuses on becoming an ‘Employer of Choice and creating a ‘WOW experience for all new hires.
Initiatives under this pillar this year focused on revamping the new joiner experience, Hero Campus Challenge Season 10, driving innovation and talent through participation as Gold Sponsor at BAJA SAE 2026 and focus on diversity. We are proud to report that 36% of our latest campus intake are women.
Hero.Belong ensures a workplace where everyone feels heard, valued, and comes together as ‘One Hero Family.
Hero.Learn targets building a learning culture through academies & defined learning pathways. Key development programmes under this pillar in FY 2025-26 included First Time People Manager Programme, Hero MBA, Women in Leadership Programme and Hero B.Tech.
Total training hours in FY 2025-26 stood at 8,09,116.
HeroThrive enables employees to grow in meaningful careers supported by best-in-class and transparent people policies & practices, promoting a culture of meritocracy, powered by a robust and agile performance management framework.
Hero.Tribe focuses on continuing with the Hero family for life ‘Once a Hero, Always a Hero by providing post-retirement retention programmes. Read more page141-145 .
Corporate Social Responsibility
Corporate Social Responsibility is integral to our commitment towards inclusive and sustainable growth.
Guided by the pillars of greener, safer, and equitable communities, the Company continues to drive impactful initiatives across environmental conservation, road safety, healthcare, education, skill development, sports promotion, and community well-being. In FY 2025-26, Hero MotoCorps CSR initiatives positively impacted over 5.28 lakh people across India.
Under its Greener pillar, the Company continued to strengthen its environmental stewardship through initiatives focused on water conservation, biodiversity restoration, ecological preservation, and sustainable resource management. Through its Equitable pillar, Hero MotoCorp advanced initiatives aimed at expanding access to education, healthcare, livelihood opportunities, and sports development. Under the Safer pillar, Hero MotoCorp continued to promote responsible road usage and safer mobility practices through nationwide awareness and training programmes.
Through these focused interventions, Hero MotoCorp continues to create meaningful social impact while contributing towards nation-building and the achievement of the United Nations Sustainable Development Goals (SDGs). Read more page152-157 .
Sports: Empowering Youth, Elevating India
We consider sports the power to move people, transform lives and propel a nation forward, much like our belief towards mobility. During FY 2025-26, we took strides across sports to inspire millions to dream bigger, aim higher and rise together.
Golf
Hero MotoCorp proudly anchors some of the worlds most prestigious tournaments, including the Hero Indian Open, Hero Womens Indian Open, Hero Dubai Desert Classic, and Hero World Challenge. To strengthen the professional ecosystem in India, the Company supports the Hero Womens Pro Golf Tour, governed by the Womens Golf Association of India.
Our long-standing global partnership with Tiger Woods continues to amplify our stature, while we actively nurture a new wave of talent, including Pranavi Urs, Tvesa Malik, Diksha Dagar, Akshay Bhatia, Sahith Theegala, and
Rayhan Thomas.
Hockey
Hero MotoCorp continues its long-standing role as a Global Partner of the International Hockey Federation since 2010, alongside its association with the Asian Hockey Federation. Locally, the Company has strengthened the domestic ecosystem through the Hero
Hockey India League, spanning both mens and womens competitions to create a comprehensive platform for talent development. This mission is further supported by hockey legend and Brand Ambassador, Sardar Singh, whose legacy continues to inspire the next generation.
Cricket
significant During FY 2025-26, Hero MotoCorp supported both the
Indian Mens and Womens National Teams through bilateral series, while maintaining a strong presence across marquee global tournaments, including the IPL, ICC events and the Asia Cup. This year, the brand expanded its future-focused momentum by associating with rising star and emerging cricket talent, Abhishek Sharma.
IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000
IIFL Capital Services Support WhatsApp Number
+91 9892691696
Download The App Now
Follow us on
2026, IIFL Capital Services Ltd. All Rights Reserved
IIFL Capital Services Limited - Stock Broker SEBI Regn. No: INZ000164132 (Member ID - NSE: 10975 BSE: 179 MCX: 55995 NCDEX: 01249), DP SEBI Reg. No. IN-DP-185-2016, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, Merchant Banker SEBI Regn. No. INM000010940, RA SEBI Regn. No: INH000000248, BSE Enlistment Number (RA): 5016, AMFI-Registered Mutual Fund Distributor & SIF Distributor
ARN NO : 47791 (Date of initial registration – 17/02/2007; Current validity of ARN – 08/02/2027), PFRDA Reg. No. PoP 20092018, IRDAI Corporate Agent (Composite) : CA1099
This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.
