Hero MotoCorp Limited: Comprehensive Stock Analysis Report | Scrolls

by KarNivesh | 17 October, 2025

Hero MotoCorp Limited Comprehensive Stock Analysis Report- Scrolls.pdf

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Hero MotoCorp Limited: Stock Overview

Hero MotoCorp Limited, India’s largest two-wheeler manufacturer and the world’s leading motorcycle producer by volume, stands at a transformative point. The company is balancing its strong traditional market leadership with challenges from changing consumer preferences, rising competition, and the accelerating shift toward electric mobility. Despite losing some market share over the years, Hero maintains robust financial health, operational efficiency, and strong investor confidence-positioning it as a key player in India’s mobility transformation.

Corporate and Strategic Overview: Headquartered in New Delhi, Hero MotoCorp operates through a vast ecosystem of 6,500+ dealerships and multiple manufacturing facilities. Its product portfolio spans from entry-level commuters like the Splendor and HF Deluxe to premium motorcycles such as Xpulse, Karizma, and the newly launched Xtreme 250R. The firm’s dominance in rural India-contributing over 50% of its sales-remains its biggest strength.

In 2025, the company witnessed major leadership changes. With CEO Niranjan Gupta stepping down, Harshavardhan Chitale is set to take over in January 2026. Chitale’s appointment is expected to accelerate Hero’s focus on electric vehicles (EVs) and premium products. A strategic milestone was the spin-off of its Electric Vehicle and Emerging Mobility Business Unit (EMBU) into an independent entity-signaling Hero’s long-term commitment to EV growth.

Financial Strength and Performance: Hero MotoCorp reported revenue of ₹37,599 crore in FY2024, registering a five-year CAGR of 6.5%. EBITDA margins rose to 16%, and net profit margins to 10%, supported by cost efficiency and favorable input prices-particularly a 1.29% decline in steel costs. With total assets of ₹26,153 crore and equity of ₹17,699 crore, Hero maintains one of the strongest balance sheets in the industry. Its debt-to-equity ratio stands at a low 0.034, reflecting minimal leverage. The firm’s Return on Equity (ROE) of 21.2% and Return on Capital Employed (ROCE) of 31.8% highlight its capital efficiency.

Hero MotoCorp's financial performance shows strong revenue recovery from 2023 onwards, with EBITDA and net income also improving significantly in 2024.

Market Dynamics and Competition: The Indian two-wheeler industry recorded 1.89 crore registrations in FY2025, growing 8% YoY, driven by rural demand and government-backed rural credit expansion of ₹3.3 trillion. Hero holds a market share of 28.84%, ahead of Honda (25.37%) and TVS (17.49%), though down from its peak of 39% in 2015–16. While the Splendor series continues to lead sales, Hero’s EV arm-VIDA-holds 5% of the electric two-wheeler market, trailing Ola Electric, TVS, and Bajaj.

Valuation and Shareholder Insights: Hero’s shares trade at a Price-to-Earnings (P/E) ratio of 24.5x, lower than peers like TVS (65.5x) and Eicher Motors (45.5x), indicating a potential value opportunity. Promoters hold 34.74% of shares, while institutional investors collectively own over 50%, reflecting solid market confidence. Hero’s dividend of ₹65 per share provides a yield of nearly 3%, backed by strong cash flows of ₹605 crore.

Outlook and Risks: Hero’s growth strategy focuses on premiumization, EV adoption, and international expansion. However, declining market share, high dependence on rural demand, and intense EV competition remain key risks. Yet, with a strong balance sheet, steady profitability, and strategic transformation under new leadership, Hero MotoCorp appears well-positioned to ride India’s evolving mobility wave-offering long-term value for investors.