hero motocorp ltd share price Management discussions

At Hero MotoCorp, we believe that Indias automotive industry has a rare opportunity to set the global agenda – in terms of volume growth, technology, market share and innovation – by leveraging our domestic market which is one of the largest in the world.

Over the last decade, India, with significant investments made in her people, infrastructure creation and growth in consumption has gained centre stage. India has several factors in its favour with one of the highest GDP growth rates in the world, rising per capita incomes, the worlds largest youth demographic, fast accelerating infrastructural connectivity, and growing technological, design and manufacturing prowess that it has built indigenously. It is indeed tempting to announce that the country will write the script for the global economy. But the reality is not that straightforward. Indias persistent inequalities, sensitive geopolitical position and fragmented, domestic situation act as speed breakers for what might seem a once-in-a-millennium opportunity to turn the nations fortunes.

We at Hero MotoCorp Limited (Hero) believe that the Countrys domestic industry has a rare opportunity to set the global agenda – in terms of volume growth, technology, market share and innovation – by leveraging on her domestic market which is one of the largest in the world. Hero is already far down this road with our extensive portfolio of product launches targeted at every viable market segment, with an accent on value, efficiency and performance. Additionally, it is our belief in sustainable mobility for the future that has seen us draw up a host of options in the electric vehicles space. Considerable work is underway in forging synergistic partnerships and creating ecosystem infrastructure. The growth curve is for us to scale and to create strengths that will propel us forward.

Global Economy

With no end in sight for the Russia Ukraine conflict, energy and commodity markets continued to remain volatile, along with persisting disruptions in global supply chains. In 2022, global economic growth slowed to 3.2%, with rates not expected to improve substantially over 2023 and 20241. As inflationary tendencies lurch, all-round monetary policy tightening has led to prolonged cool off in demand. These conditions have affected investment growth. The worlds three major engines of growth —the United States, the Eurozone and China—are undergoing a period of pronounced weakness, with adverse spill overs for emerging market and developing economies (EMDEs). However, the good news is that towards the latter part of FY 2022-23 and leaning into the next fiscal, energy and food prices have softened significantly, which augurs well for return of global demand and ebbing of the tight liquidity conditions seen in FY 2022-23.

Cost inflation, financial stress balanced by high growth

In the early part of the financial year, the United States witnessed high growth rates in continuation of its post-pandemic recovery. However, inflation pressures arose due to various factors, leading to sharp rate hikes by the US Federal Reserve. Subsequently, inflation fell which was accentuated by stresses in the financial system which led to some (smaller) bank runs. However, the Fed may reach the terminal rate earlier than anticipated. This, coupled with higher borrowing costs and economic uncertainty, is expected to slow down economic activity in the US in 2023. Acute gas shortages continue to weigh down on the Eurozone economies. The energy crisis brought down GDP growth from 5.2% in 2021 to 3.1% in 2022. UKs growth declined by almost half due to the pervasive cost-of-living crisis.

Though the European Central Bank (ECB) and Bank of England (BoE) has stepped in to combat high inflation, leading to a decrease in the regions retail inflation, it remains higher than the US and way higher than their 2% target. Retail price caps and renewable energy efforts are being introduced, but coordinated action is needed. Chinas economy is expected to rebound and contribute significantly to global growth, but challenges remain in the countrys real estate sector and the possibility of other pandemic outbreaks persist. While the traditionally strong economies, suffered weakened growth rates, several other regions of the world turned in robust growth figures due to their differentiated management of the post-Covid demand cycle and/ or their energy security status. In 2022, the MENA region experienced its fastest growth since 2016, at 5.4%.

The increase in oil prices greatly benefited the GCC countries, led by Saudi Arabias growth of 8.7%. However, economic activity is expected to slow down in FY 2023-24 due to OPEC+ output cuts, declining oil prices and a drop in global oil demand. Sub-Saharan Africas recovery has been inconsistent, with GDP growth slowing due to elevated inflation levels. In response, central banks across major African economies increased their interest rates in 2022. Real GDP across Sub-Saharan Africa is expected to drop to an average of 3.3% in 2023.2 Latin Americas economies fared well in 2022 despite the domino impact of the worldwide crisis caused by challenges in Ukraine and global interest rate hikes.

The region witnessed approximately 4% economic expansion, strong employment recovery and a rebound in the service sector. Inflationary pressures have eased in many countries, although core inflation remains high in Brazil, Mexico, Chile, and Colombia, and only slightly lower in Peru.

Global GDP Growth

GDP Growth FY 2021-22 FY 2022-23 FY 2023-24
World Output 3.4 2.8 3.0
Advanced Economies 2.7 1.3 1.4
United States 2.1 1.6 1.1
Euro Area 3.5 0.8 1.4
UK 4.0 -0.3 1.0
Emerging markets 4.0 3.9 4.2
China 3.0 5.2 4.5
India 6.8 5.9 6.3
Russia -2.1 0.7 1.3
Middle East and Central Asia 5.3 2.9 3.5
Sub-Saharan Africa 3.9 3.6 4.2
Source: IMF, April 2023


As per the IMF, the post-pandemic resurgent growth of 3.4% witnessed in FY 2021-22 is likely to fall to 2.8% in FY 2022-23, before settling at 3.0% in FY 2023-24. Advanced economies are expected to see an especially pronounced growth slowdown, from 2.7% in FY 2021-22 to 1.3 percent in FY 2022-23. Further, public debt as a ratio to GDP which soared globally during the COVID-19 pandemic years, is expected to remain elevated. Certain regions of the world are moving against this trend, with India at the forefront of the GDP growth tally. Domestic consumption and accelerated capital formation is likely to keep India growth engine moving forward.

GDP Growth Projections

Upward revision, by 0.3pp or more no change or smaller than 0.3pp or more downward revision, by 0.3pp or more

FY 2021-22 FY 2022-23 FY 2023-24
World 3.4 2.8 3.0
Australia 3.7 1.6 1.7
Canada 3.4 1.5 1.5
Euro Area 3.5 0.8 1.4
Germany 1.8 -0.1 1.1
France 2.6 0.7 1.3
Italy 3.7 0.7 0.8
Spain 5.5 1.5 2.0
Japan 1.1 1.3 1.0
Korea 2.6 1.5 2.4
United Kingdom 4.0 -0.3 1.0
United States 2.1 1.6 1.1
2021-22 2022-23 2023-24
G20 3.1 2.6 2.9
Australia 3.7 1.6 1.7
Brazil 2.9 0.9 1.5
China 3.0 5.2 4.5
India 6.8 5.9 6.3
Indonesia 5.3 5.0 5.1
Mexico 3.1 1.8 1.6
Russia -2.1 0.7 1.3
Saudi Arabia 8.7 3.1 3.1
South Africa 2.0 0.1 1.8
Turkiye 5.6 2.7 2.6

Source: IMF, April 2023


1 https://www.oecd.org/economic-outlook/march-2023/


2 https://www.spglobal.com/marketintelligence/en/mi/research-analysis/gdp-growth-in-subsaharan-africa-likely-to-svlow-in-2023-.html

Indian Economy

In 2022, India became the fifth largest economy in the world with a nominal GDP of US$ 3.53 trillion. The countrys climb to higher levels of economic prosperity is just a beginning. As per the investment bank, Morgan Stanley, India will be one of only three economies in the world that can generate more than US$ 400 billion annual economic output growth from 2023 onward, and this will rise to more than US$ 500 billion after 2028 . With one of the largest domestic markets in the world, selling successfully at home is half the distance travelled for most companies operating in India. In 2022, overall consumption totalled US$ 2 trillion in the country, emerging as the primary growth driver. The agricultural sector also performed well, with a record-high rabi crop. However, persistent core inflation dampened spending, as the CPI (consumer price inflation) remained high, though the wholesale inflation was less prominent. With the Reserve Bank of India (RBI) taking periodic measures to control money supply, the core, secondary and tertiary sectors responded positively. The Indian economys fundamentals remain strong, with public sector spending on infrastructure and economic drivers yielding results. Robust GST (Goods and Services Tax) and direct tax collections have supported government spending, while corporate deleveraging has improved banks balance sheets and overall asset quality. The occurrence of El Nino in FY 2023-24 may adversely impact the economy, with an impact on the agriculture sector.

Transformational change is being driven through by digitisation and energy transition, as they replace older systems and open mammoth possibilities for new frameworks, delivery systems, networks, products and services. Tapping into these opportunities astutely carries promise of income generation and wealth redistribution. Hero has made significant investments in the electric mobility space for a long time. As a market mover, we have taken strategic steps to put the building blocks of clean mobility in place. Our collaborations and investments in Ather Energy, partnership with HPCL and BPCL reflect the ways in which we are investing to build the ecosystem.

Industry wise GVA (y-o-y%) FY 2021-22 FY 2022-23
Agriculture, Forestry & Fishing 3.0 3.5
Mining & Quarrying 11.5 2.4
Manufacturing 9.9 1.6
Electricity, Gas, Water Supply & Other Utility Services 7.5 9.0
Construction 11.5 9.1
Trade, Hotels, Transport, Communication 11.1 13.7
Financial, Real Estate & Professional Services 4.2 6.4
Public Administration, Defence & Other Services 12.6 7.9
Gross Value Added (GVA) 8.1 6.7
Source: Ministry of Statistics & Programme Implementation (MOSPI)


Indias robust recovery stems from factors like strong domestic consumption, energy transition, improved trade policies, infrastructure investment, and widespread digitisation. Projections indicate that by 2030, Indias GDP will surpass that of Japan and Germany, to become the worlds third-largest economy. The Atmanirbhar Bharat initiative aims to bolster Indian manufacturing and enhance self-reliance. The Product Linked Incentive (PLI) scheme, part of this initiative, is expected to boost exports, strengthen Indias technological capabilities, and reduce import dependencies.

Industry Overview

Global two-wheeler market size reached US$ 121.5 billion in 2022 and is expected to grow at a CAGR of 7% during 2023-2028 period. One of the major factors favouring the market is the demand for fast and affordable in-city commuting options along with the need for last-mile connectivity for a host of businesses that depend on regular B2C (Business to Consumer) connectivity. The expanding e-commerce sector, growth of direct-to-customer businesses (D2C), 3PL (3rd Party Logistics) is fuelling this demand. However, a critical component in todays vehicles – semiconductor chips – continued some sort of in scarcity in FY 2022-23. Lack of new capacity, supply shift to other sectors during the pandemic and stock piling were some of the key reasons for this disruption. Sectoral growth was impacted and is likely to be carried forward.

The industry is exploring newer sourcing models, stronger bonds with not just OEMs and Tier 1 suppliers but down the line as well to safeguard its supplies.

Indian two-wheeler industry

India is the largest two-wheeler market in the world with annual sales of 15.5 million units in FY 2022-23. With a growing middle-class population and increasingly congested cities, two-wheelers provide an easy, accessible and affordable personal transport option. It is a reliable mobility solution even for the sub-par road infrastructure in the hinterlands. As more people in India move out of very low-income groups, and purchasing power extends, the demand for motorised two-wheelers is likely to remain strong among lower- and middle-income groups. Demographically, a large part of two-wheeler sales in India is also driven by rural demand which makes it dependent on volatilities such as poor harvest, high cost of ownership and the variable income prospects of small businesses. In urban areas, which accounts for a larger proportion of total volumes, the demand is more broad-based – from college students to professionals, salaried professionals to delivery personnel – the user is varied and the trend is towards premiumisation.

Top Indian two-wheeler manufacturers also cater to international demand for India-made two-wheelers. However, rising inflation has stagnated this demand from low- to middle-income countries in Africa and Latin America, which are important export markets and most Indian manufacturers have found it difficult to meet their export targets. Supply-side disruptions did hurt the industry in FY22-23 as well. Price increases due to emission norms and other factors, affected domestic production. The higher costs led the manufacturers to work with having to take price increases on the one hand and absorbing the impact of passing on higher costs on to customers on the other. Hero has attempted to cushion the impact at the bottom of the pyramid.

Changing dynamics

As Indias economic growth garners global attention, domestic industry must align with national priorities to ensure we reach where evert Indian wants to be. Over the last few years, the auto industry has been called in to support Indias decarbonisation and sustainable mobility targets. Transitioning towards green mobility will reduce Indias import bill, help curb vehicular emissions and climate change.

Developing vehicles that can run on different kinds of fuel or on hybrid variants is underway and converges with national priorities. The government supports the production of Ethanol Blended Petrol (EBP), with the target of blending 20% ethanol with petrol by 2030. Ethanol, a plant-based fuel, can be used as a fuel for ICE singly or in combination, and it not only reduces the use of fossil fuels, but also curbs pollution. The increasing use of ethanol will benefit farmers, sugar mills and grain-based distilleries too in addition to helping the environment and reducing our import bill. Road safety is another key concern for the country given that India has the third highest number of road accidents in the world. With India adding 40-50 kms of new roads daily, reducing vehicles accident is important. The combination braking system (CBS) has been a big boost in this context and augurs well for the auto industry as it expects to see demand grow with the expanding road network.


The increase in consumer spending across categories during the holiday season of 2022 is an indication of a resurgence in consumer confidence and bodes well for future industry growth. With two-wheeler penetration still low, combined with the growing road network, the future holds great promise. Other factors driving growth are the availability of unique underwriting tools that enable new age digital lenders to cater to a large section of credit worthy customers who were traditionally outside the formal lending ecosystem. Financial penetration will further shape the demand for two-wheeler purchases going forward. Rising incomes in urban pockets are expected to drive demand for premium bikes with higher cubic capacity (CC), while the growing tribe of lifestyle riders is likely to push up the aspirational value of the super-premium segment occupied by Harley Davidson. Rural demand has also started to accelerate, with entry level or commute friendly bikes under 110 cc gaining favour.

There is an increasing emphasis by the government to switch from ICE engines to electric mobility, and there is no doubt that that is the future of the industry. However, it is also true that EVs are still at a nascent stage and are expected to reach 40% ownership by 2030. Concerns of safety, range anxiety, battery stability are common and have held back fast growth. With the likelihood of reaching scale economies still a distant possibility, cost of EVs remain well above conventional two-wheelers. We, at Hero, are well aware of these concerns and have been working at making an equally extensive portfolio of EVs available for the consumer.

Strategic Progress

In step with evolving market dynamics and customer needs, we have constantly reimagined our product portfolio. We have products across the commuter, premium and super premium segments.

Regulatory Transition

We continue to use evolving regulatory norms as a way of staying ahead and bringing high-technology products. We launched OBD2 Phase A models, and also those that are E-20 (Ethanol) compliant, just as we offered BSIV and BSVI models ahead of their respective timelines.

Our differentiated product offerings

Enhanced visual identity Rich customer experience Tech enabled Universal appeal Youthful energy

Our two new premium models, Xtreme 200 4V and Xoom, come with industry-first features, representing our focus on making our products high-tech and feature-rich. At Hero MotoCorp are working with a target of premiumisation of our portfolio by FY 2024-25. To achieve this, we are driving technology-led premiumisation for our core models under the XTEC brand umbrella. This year we extended it with the launch of Passion Pro XTEC, Splendor XTEC and Super Splendor XTEC, which have gained significant traction and exceeded the demand for the parent models. We launched Xpulse 200 rally edition in LATAM and Passion XPro XTEC in Bangladesh, making advanced tech features available even for our commuter segment riders.

To grow the core and also expand into more categories, the following strategies are being implemented:

h Deeper penetration and attracting first-time buyers: Campaigns like Mileage ka Hero and Dumdaar Power have been run to attract new customers and increase market share. h Retail finance initiatives: With the intent of making our products financially accessible, we had set the target of improving finance penetration from 47% in FY 2019- 20 to 57% in FY 2022-23, against which we were able to achieve 60%. By improving financial access, we were able to rope in a larger customer base.

h Leverage widest reach: The Company has utilised its extensive distribution network to reach a larger customer base.

h Focus on younger customers: India has one of the youngest populations in the world. To leverage this advantage, we have introduced the XTEC models. These models are designed to cater to the preferences and needs of the younger demographic, offering features and designs that appeal to them.

h Support core products: Strong brands like Glamour, Super, and Passion have been developed to support the core product, Splendor. Passion+, an iconic model, has been used to attract aspirational first-time buyers and expand the customer base.

h Special focus on 125 cc and premiumisation: XTEC models with several industry-first features like best-in-class acceleration and handling have been launched in the 125 cc category. Providing a premium riding experience to customers, the Company aims to recover market share in this segment and to realise its premiumisation strategy.

h Up/down trade opportunity: In addition to the core products, the XTEC models offer customers the opportunity to upgrade or downgrade their models, based on their preferences, further increasing the appeal of this range. Increasing scooter sales is of high priority for us as we keep extending our reach into newer markets. The newly launched Xoom has been well-received by consumers and we see fantastic potential for similar products that offer a combination of great looks, superior mileage and unbeatable features. We are introducing exciting features like corner bending lights, bigger and wider tires, aerodynamic design to our lineup of scooters so that they are differentiated and carry an enhanced appeal.

25 %


Presence in Electric Mobility Picks Up Speed

With the launch of our first electric scooter – Vida V1 in FY 2022-23, Hero MotoCorp has begun the exciting journey of transforming personal mobility. With Vida we are creating a whole new experiential space for the customer and also building the ecosystem that will see such products thrive. Vida comes with best-in-class features like cruise control, keyless entry and geo-fencing. Vida marketing is unique with extensive leverage of the social media and use of experiential formats like Vida Experience Centre, Vida pod and Vida hub that help interested buyers get a chance to assess the complete riding experience prior to buying. In FY 2023-24, the Vida will be available through our networks in more than 100 cities, helping bring this superior product range within close reach of a large cross section of buyers.

Partnerships and Collaborations

Hero MotoCorp has entered into a strategic partnership with Zero Motorcycles, USA, to develop premium electric motorcycles. This collaboration marries the expertise of Zero in developing power trains and electric motorcycles, with the scale of manufacturing, sourcing and marketing prowess of Hero MotoCorp to reach the large Indian and other international markets.

The collaboration with Harley-Davidson has progressed well. Our effort is to develop a platform that will offer models embedded with the Harley premium DNA of the brand, establish our presence in the upper premium standard category.

We are driving the change towards green mobility through our investment in Ather Energy, and HPCL and BPCL India for a charging network expansion.

Operational Highlights

During the year, key focus areas were strengthening operational excellence through digitised manufacturing cells, safe and sustainable operations, a future-ready workforce, building an innovation culture, and diversity and inclusion.

Parts Accessories and Merchandise (PAM) Business

Hero MotoCorp is strategically expanding its revenue streams by focusing on parts, accessories, and merchandise (PAM) offerings. By pioneering parts micro distribution and doubling the retailer base in just three years, the Company has enhanced accessibility and convenience for customers. With its partnership with the influential Asli Heroes (retail mechanics) and leveraging efficient logistics supported by a best-in-class Global Parts Centre, the Company has been able to effectively reach a wider audience and ensure timely delivery of products. Further, our portfolio now includes oil, bike care products, and accessories, aligning merchandise offerings with business growth to provide added value to customers. The PAM business grew at a healthy pace with a 23% growth to touch nearly D 5,000 crore worth of revenues in FY 2022-23.

We are strengthening our strategy of Increasing Breadth and Depth of the Business through the effective implementation.

Increasing Breadth

To enhance the availability of Parts and Oil through direct distribution, we undertook white space analysis to identify pockets where distribution penetration could be enhanced. A time-bound action plan was developed to increase the number of super stockists, Hero Genuine Parts Distributors (HGPD), Retailers and Asli Hero.

• Five new Super Stockists were onboarded in FY 2022-23, taking the total to over 90.

• 10%+ new HGPDs were onboarded in FY 2022-23, taking the total to over 330.

• Increased our retailer base to 42,000+ from 39,000 in the previous year.

Increasing Depth

We are focusing on enhancing the bin size per retailer. Over the past two years, we have added almost 15,000 new retailers in the C&D category retailers and there is an opportunity to consolidate and extract more business from select C&D retailers.

Foster Programme – Our program for extracting more business from select 3,000 C&D category retailers through enhanced engagement level and market development activities.

SKU per retailer – A higher range penetration to retailers helps gain retailer counter share. We have increased the SKU per retailer to 60 and doubled the bin size per retailer in the last three years.

70 %


Hero Genuine Oil (HGO) business

Establishing HGO as a preferred brand among hero two-wheelers, the business grew by 32% to D 638 crore FY 2022-23. We did BTL activities to create a market pull and brand recall for HGO. Long-term tie-ups were also formed with existing Asli Hero technicians to drive growth.

Enhancing manpower competency – In the last three years, 325+ channel partners have been onboarded in the parts business. We have created a framework for enhancing competency by digitalising training.

Engaging the influencer community – Technicians are the key influencers for the Parts & Oil business to generate demand. To enhance the engagement level digitally through Asli Hero App, various gamification activities like Diwali Dhamaka, Golden Ticket, and Spin on the Wheel were conducted. The unique activity of birthday celebration once a month at each HGPD was done to develop our relationships.


Dharuhera Plant:

• Implementation of adiabatic cooling tower.

• VRV system for Engine Assembly Expansion.

• Lighting automation for Engine Plant Expansion.

• Multiple initiatives for reducing energy loss, including power-saving circuits, occupancy sensors, and energy-efficient lighting.

• Overall savings of approximately 7 lakh units per year.

Gurugram Plant:

• Installation of a Centralised Heat Pump System for Weld Shop Washing Machines.

• Sludge Dryer Heating System with Hot Water Generator instead of Electric Heaters.

• Achieving Unity PF at ESS through the integration of APFC panels.

• Replacement of conventional fans with Energy Efficient BLDC wall-mounted Office fans.

Haridwar Plant:

• Adoption of process optimisation and energy-efficient equipment.

• Automatic Tube Cleaning System in EA chiller.

• Heat Pump for washing machines in Steel Phase.

Neemrana Plant:

• Process optimisation and improvements in sweeping fans, roll-up door, and air curtain installations.

Halol Plant:

• Reduction of fuel consumption by magnetic resonator.

• Reduction of power by Elesol Plate Installation at Air Compressor.

• Installation of a hybrid thermal solar panel in HVAC.

• Electrical sanding instead of pneumatic sanding.

• Savings of approximately 2 lakh units per year.

Tirupati Plant:

• Implementation of various energy reduction, saving, and optimisation initiatives.

Branding and Marketing

Hero has a strong connection with todays youth. It represents energy, enthusiasm and determination. We have been working on campaigns that align with our premiumisation strategy. During the year, we continued to explore varied set of activities to find a connect with our target audiences. Activities included promotion through advertisement campaigns, launch of experience centres and sponsorship of events that revolve around adventure and zest. We believe biking is not just limited to a particular gender, and hence we conducted women-specific biking events such as the women biker league. The broadened appeal of the reach out was further amplified through rallies and women specific events. Some important branding initiatives during the year:

• Launched XClan – the exclusive community for Xpulse 200 customers in multiple parts of the country including Bengaluru, Mumbai and in the Northeast.

• Launched the Xpulse Xperience Centre in Bengaluru, where off-road enthusiasts can book a riding session with experts across three levels.

• Launched the Hero Dirt Biking Challenge for biking enthusiasts and amateurs to showcase their talent on a national platform. The winner was awarded a sponsorship contract worth D 10 lakh and an Xpulse 200 4V Rally Edition. The event was also aired on MTV and Voot as a 5-part series.

• Women Biker League was a one-of-a-kind motorcycle competition where 50 enthusiastic women riders went through a series of riding and physical fitness obstacles on the Xpulse.

Mega Service Carnival – These were executed in August 2022, October 2022 and March 2023 and reached 17.19 lakh customers across 6,000+ service points.

Roadside Assistance Scale up – A program aimed at creating peace of mind and to ensure all the support related to two-wheeler for our customers, the Roadside Assistance program of Hero through Europ Assistance (NZ, WZ, EZ) and AWP (SZ, CZ) has 5.74 lakh enrolled in FY 2022-23.

JoyRide Programme – The annual maintenance programme extends vast savings for customers on the periodic service maintenance costs. 77.41 lakh customers have taken benefits of this programme and currently 24.38 lakh customers are availing the benefits. JoyRide Programme packages are customised as per customers requirement and riding pattern with combinations of 1, 2, 3, 4 or 6 service packages.

This programme entitles the members to enjoy vast savings, while maintaining their Hero two-wheelers at authorised service centers.

Customer Experience Index and Net Promoter Score – Hero Happiness Score is now termed as Customer Experience Index, which measures the satisfaction level of customers in service. Continued actions on the In-Store Customer Satisfaction findings through Customer Experience Index have led to improvement in service delivery, matching customer expectations, which is monitored monthly.

Micro Dealer Extension Counters and Express Service Centres – The initiative planned to provide Extended Service Reach for the benefit of customers, especially in metro and urban towns, extended to 34 towns pan India. Currently, 109 outlets are active for customer service.

Asli Hero Technicians – Market Capability Enhancement Programme

Training for 15,000+ private garage owners to ensure their service support readiness for vehicles reporting to their outlets.

Initiatives at the Dealer End

Hero eXpert Learning App: A complete digital learning solution providing technical standard operating procedure (SOP) documents for our dealers technical staffs reference and self-learning.

Vehicle Communication Interface (VCI) Scanner: Diagnostic tools were distributed to 4,800+ Asli Hero technicians at a competitive price.

Commitment to Affordability and Customised Financing Solutions

Hero has been a pioneer in providing mobility solutions to customers across all segments of the customer pyramid. One of the major roadblocks in ensuring easy acquisition of a new two-wheeler is the issue of affordability. Recognising this concern, Hero has consistently made efforts to address affordability while providing ease of ownership through customised finance schemes.

Suvidha (DCC) Scheme: This scheme specifically caters to unbanked or underbanked customers, ensuring they have access to financing options.

Aadhaar-Based Funding: Customers who do not have traditional income proofs can still avail financing through this scheme, which leverages Aadhaar identification.

Low Down Payment Schemes: Hero offers schemes with low down payment options, enabling customers who may not have substantial funds to upgrade to a motorcycle or scooter.

Kisan Kisht Scheme: This scheme is designed to support farmers, providing them with tailored financing solutions to meet their specific requirements.

Honor First Scheme: Exclusive finance options are available for armed forces personnel through this scheme, which is applicable in Canteen Stores Departments (CSDs).

No Hypothecation Finance: Hero offers financing options that eliminate the need for customers to hypothecate their vehicles, ensuring convenience and ease of ownership.

Card Offers: Hero collaborates with various card issuers to offer special finance offers to cardholders.

The Digital Retail Finance Platform: In line with this commitment, Hero has developed a Digital Retail Finance Platform that will enhance transparency, availability, and ease for customers seeking financing options. The platform not only benefits customers by making finance more accessible and convenient, but it also supports Heros channel partners in providing suitable finance schemes tailored to the customers specific requirements. The launch of the Digital Retail Finance Platform is scheduled for the FY 2023-24, demonstrating Heros dedication to embracing digital solutions to better serve its customers.

Through these customised finance schemes, Hero has been able to increase the contribution of retail finance to more than 60% of its sales, which is one of the highest in the industry. However, the Company aims to take this achievement to the next level by introducing digital financing solutions for customers.

Riding the Digital Revolution with multi-functional impact

In order to align with the organisations objective of increasing digital contribution to the two-wheeler business, several actions have been initiated during FY 2022-23. These actions have proven successful, resulting a 50% increase in digital contribution from 4.4% in FY 2021-22 to 6.4% in FY 2022-23. Extensive digitalisation across several functional areas is now converging to drive synergies and large-scale impact. We continue to work to leverage the power of technology to help increase business contribution.

Impact on Manufacturing

Digitisation supports transforming legacy machines at plants into high-tech digital machines to improve efficiency and increase customer value. It helped increase the speed of response, save process time, and empower decision-making through data analysis. Centralised Real-Time Monitoring Systems (Cockpits) for monitoring the critical parameters of manufacturing lines, IIOTs on the shop floor, and optimal management of the parts inventory through Pull Based Ordering are some of the initiatives towards digitisation that are transforming our manufacturing function. With real-time monitoring and precise control over manufacturing processes, Hero MotoCorp is able to maintain high standards of productivity and quality while maximising efficiency throughout the production cycle.

Driving a Premium Customer Experience

We have always believed in providing a superlative customer experience, one that differentiates us from the competition. Leveraging technology and the power of extensive digitalisation of our processes we are now able to deliver the next level of customer experience that is intuitive, seamless and clutter-breaking.

With more than 100+ exclusive stores coming up over the next four quarters, we will be offering:

• Premium portfolio selection

• Phygital (physical + digital) customer journey blending physical and digital interactions

• Immersive sensorial experiences

• Thoughtfully designed store layouts, pre-defined planograms, prime locations for easy accessibility

• Staff trained in soft skills

As we get to know our customers more intimately, we are better able to deliver a superlative experience by leveraging:

• Data analytics to drive customer insights. Our marketing strategies are targeted to drive traffic and engagement through the use of personalised and contextualised customer journeys.

• Introduction of intuitive and interactive 3D configuration to create engaged buying experiences.

• Pre- and post-booking digital engagement using life-size AR Try-on

• Differentiated service experience through a unified app Other digital platforms where we are actively engaging with the customer:

Centralised eShop Portal: To enhance customer engagement, there has been a greater focus on the centralised eShop portal. This platform allows for the exclusive online launch of products, online sales booking and their digital purchase. In the next financial year, eShop will undergo a revamp to provide customers with a seamless purchase experience, so that the process of buying a Hero MotoCorp two-wheeler online becomes more user-friendly.

Digital Enquiry Generation: Efforts have been made to generate digital enquiries through centralised platforms, leveraging digital lead generation strategies. This approach helps capture potential customers interest and convert it into sales opportunities.

Hero MotoCorp Products on Flipkart: Hero MotoCorp products have been launched on the popular e-commerce platform, Flipkart, for internal combustion engine (ICE) vehicles. This initiative has generated approximately 5,500 orders during the fiscal year, albeit limited to specific cities. Building on this success, there are plans to expand the partnership to a national level.

Hyperlocal Platform Expansion: A hyperlocal platform has been introduced in five states to generate leads. This localised approach allows for targeted marketing and engagement, increasing the chances of conversion. In the coming fiscal, this platform will be scaled nationally so that localised marketing strategies may be leveraged and leads can come in from across the country.

Partnerships to Increase Digital Presence: The Company aims to establish partnerships with more digital platforms and channels to further enhance its digital presence and brand visibility and tap into a wider customer base.

With the revamp of the Hero One app and website, our subscription-based GoodLife members can now enrol, renew, access their points and transaction history, and leverage redemptions all in one place. The limited edition version of Xpulse 200 4V Rally Edition was a first-ever, digital only launch. Pre-booking and purchase of the bike could only be done through our e-SHOP portal, on Hero MotoCorps website.

Our key project Hero 2.0 has taken the next leap, with 24 phygital dealerships activated with the new VI. Now customer journey is more experiential and enabler driven in its new phygital avatar. Secondary network transformation assuring a uniform customer experience across channels. While working towards a robust and structured review mechanism, new frameworks are being implemented where channels are monitored and regularly contribute towards business goals.

In line with our commitment towards sustainability, we refocused on the Green Partner Development Programme (GPDP), which will essentially work on three fronts to make a Green Dealership. Green Products (biodegradable), Green Energy (Cool roofs, Solar Energy) and Green Processes (Dry Wash, Water recycling) are some of the key initiatives.

To keep the channel updated and future-ready, multiple learning programmes have been initiated in association with premium business institutes. Structured Succession planning and Channel Onboarding Programme are initiatives we have initiated this year. In association with BML Munjal University, the ‘Women in Successful Entrepreneurship (WISE) Programme for our women dealer entrepreneurs was launched.

Strengthening Reach: Addressing Rural Demand

Expanding Secondary Network and Rural Sales

Hero MotoCorp commands a strong coverage in the hinterland of India with more than 5,200 secondary networks with 3S facilities. This extensive network enables the Company to reach customers in every corner of the country, ensuring seamless offerings and services. Notably, the secondary network channel is a key differentiator, highlighting its importance in catering to the rural demand.

Catering to Rural Customers Preferences

The secondary network channel provides rural customers with a wide range of options to choose from. Hero MotoCorp has successfully sold

28,000 premium range motorcycles and 1,36,000 scooters through this channel in the past year. This demonstrates the popularity and demand for Hero MotoCorps products in rural areas, where customers have the opportunity to purchase their favorite two-wheelers from the Companys offerings.

Strengthening Partnerships and Support

FY 2022-23 was a milestone year for network partners at Hero MotoCorp. The Company launched several initiatives to strengthen communication and engagement with its partners. Hero MotoCorp significantly increased its field team to provide dedicated support to network businesses and assist them in achieving operational excellence. Furthermore, the infusion of 350+ crore working capital at the network partners disposal enabled them to increase their stocks and effectively meet the surge in demand post-Covid.

Investing in People and Skills

The Company plans to upskill over 25,000 employees working at these network points, equipping them with new and upcoming technologies. The training initiatives will also provide knowledge about digital platforms, enabling employees to serve customers effectively in the digital age.

Driving Rural Growth and Customer Satisfaction

By focusing on empowering its network partners and enhancing their capabilities, Hero MotoCorp aims to solidify its presence in rural areas and cater to the growing demand for its products. With investments in people and technology, the Company strives to provide exceptional service and support to customers across its extensive secondary network. This approach ensures customer satisfaction and contributes to the overall growth of the rural market for Hero MotoCorp.


Todays supply chains are incredibly complex, involving diverse partners across multiple geographies in an intertwined global trade ecosystem. The current market volatility with respect to raw material prices, energy costs and the availability of semiconductor chips highlights the importance of a strong supply chain management process for organisational success.

Electronic component shortages

Hero MotoCorp proactively manages its supply chain through vigilant monitoring and by establishing long-term agreements to ensure stability of supply sources. By developing multiple sources and cultivating direct relationships with tier 3/4 chip suppliers, we have been able to remain agile and resilient.

Product maturity

The design maturity of EV parts and premium components necessitates meticulous attention and multiple iterations. Hero MotoCorp follows a rigorous development process to ensure the production of high-quality components and subsystems that guarantee optimal performance and reliability.


Successfully validated and secured a reliable supply of cylindrical cells from renowned manufacturers such as LGES, Samsung SDI, and Panasonic. In addition to this, the Company is actively exploring alternative form factors and new chemistries to further enhance its product offerings. Hero MotoCorp is committed to testing new sources, including BAK and sVolt, to ensure a diversified and resilient supply chain.


Technology Integration

Hero MotoCorp partners with non-automotive giants like Google and Airtel, and global leaders such as Bosch and Aptiv, to drive innovation. The Company also prioritises on localising technologies and parts, and employs advanced manufacturing techniques like hydroforming for premium handle quality.

Financial Performance

Particulars FY 2021-22 FY2022-23
Number of Motorcycles and Scooters Sold (in lakh) 49 53
a) Revenue from Operations (in crore) 29,245 33,806
b) Other Income 557 565
Total Income 29,802 34,371
a) Cost of Materials Consumed & Changes in Inventories 20,827 23,858
b) Employee Benefits Expense 1,935 2,190
c) Other Expenses 3,790 4,448
Total Expenses 26,552 30,496
Profit Before Tax (in crore) 3,250 3,875
Tax Expense 777 964
Profit After Tax (in crore) 2,473 2,911
Other comprehensive income (5) (9)
Total comprehensive income 2,468 2,901
Earning per equity share on profit after tax 124 146

Major Movements in Balance Sheet Figures

Key Financial Ratios

Particulars FY 2021-22 FY2022-23 % Change
Trade receivables turnover ratio 15.51 16.75 7.98
Inventory turnover ratio 16.07 18.66 16.14
Interest coverage ratio 140.19 212.02 51.24
Current ratio 1.99 1.61 -19.42
Debt equity ratio 0.01 0.01 -12.13
Operating Profit margin (%) 9.30% 9.85% 5.91
Net Profit ratio /margin (%) 8.30% 8.47% 2.05
Return on Equity (%) 15.96% 17.92% 12.23


Trade receivables turnover ratio – The debtor turnover ratio increased from 15.51 times in FY 2021-22 to 16.75 times in FY 2022-23 primarily due to higher revenues signifying improved efficiency in collecting outstanding debts and maintaining a healthy cash flow.

Inventory turnover ratio – The inventory turnover ratio has witnessed a rise from 16.07 times in FY 2021-22 to 18.66 times in FY 2022-23. This increase can be attributed to two key factors: an increase in material costs and a decrease in the average inventory level. The higher turnover ratio indicates improved inventory management efficiency.

Interest coverage ratio – The interest coverage ratio has increased by 51.24% primarily due to higher profits during the year. A higher interest coverage ratio indicates better financial health and the ability to meet interest obligations comfortably.

Current ratio – The current ratio has experienced a decrease from 1.99 to 1.61, primarily due to a proportionally larger decline in current assets. The current ratio is a measure of a Companys ability to meet its short-term obligations using its current assets.

Debt Equity Ratio

Operating Profit margin (%) – Operating profit margin for the year has increase from 9.30% to 9.85% on account of effective pricing strategy, increased parts contribution, and prudent control on the overheads.

Net Profit ratio /margin (%) – The net profit margin has experienced a slight increase from 8.30% to 8.47%, primarily attributed to the softening of commodity prices and improved overhead management.

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 by 1.96% y-o-y. The enhanced Return on Net Worth indicates improved financial performance and efficiency in utilising the Companys resources to generate profits. It demonstrates the Companys ability to generate a higher return on the capital invested by shareholders, reflecting positively on its overall financial strength and profitability.

Human Resources

In the relentless pursuit of our vision _- Be the Future of Mobility- we have embraced new technologies to bring greater agility into our working practices. Our goal is to use automation and digital, data-led processes for employee engagement throughout the five stages of the employee lifecycle - from assessing a prospective candidate to recruitment, onboarding, development, grooming, reskilling, and retention to offboarding.

COVID-19 and Digital HR

COVID-19 blurred the difference between the workplace and home. Digital platforms were our only way to connect. At Hero, this was when we realised technologys transforming potential. After the pandemic, our focus on digitisation remained. We were looking at innovative ways of enhancing an employers experience at Hero MotoCorp. We focus on interventions to promote innovation and allow employees to develop ideas for our products, services and business models.

Health and Well-being

The Organisation has established a health and wellness management system to support and ensure the overall wellbeing of our workforce. We have created and implemented programmes and policies by incorporating world-class best practices for ensuring a healthy and safe workplace and related compliance management systems. These policies and programmes have been designed to prevent physical (including occupational), mental and psychosocial health issues. Our occupational health and safety (OHS) policy ensures that health and wellness are incorporated into our business strategy.

The Companys Employee Relation (ER) practice ensures fair and reasonable processes compliant with regulatory and governance requirements. We have developed a productive and progressive employee relations framework that focuses on the holistic growth of employees and aids them with tools that help in continuously learn and acquire new skills.

Read more: employee engagement on page 87 of the narrative section


Working with communities is an ideal way to imbibe sustainable growth. As a part of this approach, we consistently undertake multiple projects in water, health, education and employment generation. Our interventions ensure that community members get a better quality of life. Giving back to society goes beyond compliance and aligns with our philosophy of inclusive growth.

Read more: about our initiative on page 88 of the narrative section.

Risk Management

Both internal and external vulnerabilities must be considered while developing an effective risk mitigation approach. Effective risk management helps to prevent accidents, minimise product recalls, achieve business continuity, and ultimately protect our brand reputation. We do this regularly, and the risk management committee oversees all operations. Our robust risk assessment has helped us deal with COVID-19 related disruptions effectively. It has re-emphasised the significance of mitigation measures in managing crises.

Read more: about risk management on page 76 of the narrative section.

Internal Controls

We have a solid and well-ingrained internal controls framework. The Audit and Assurance function reassures the Board about the adequacy and efficacy of internal controls, advises management on the dynamic risk landscape, and helps anticipate and mitigate emerging and evolving risks. The internal audit plan is developed in consultation with Statutory Auditors, focuses on critical risks that matter, and is aligned with the Companys business objectives. Key internal audit findings are reviewed by the Audit Committee each quarter. The Audit Committee also monitors the status of management actions emanating from internal audit reviews. Our focus continues to be on automating internal audit procedures and using technologies such as data analytics, artificial intelligence, and machine learning by implementing a continuous monitoring tool.+