Hero MotoCorp to maintain growth investments despite margin pressures, says CEO

Hero MotoCorp has announced that it will not scale back its growth spending to protect near-term margins. Speaking during a post-earnings call with analysts, Chief Executive Officer Harshvardhan Chitale stated that the company remains committed to investing in capacity expansion, brand building, its premium scooter segment, electric vehicle (EV) operations, and its global business portfolio.

The announcement follows the company's financial results for the second quarter of fiscal year 2027, which saw net profit increase by 42 percent year-on-year to ₹1,861 crore, supported by strong sales. Chitale noted that despite commodity cost impacts that manifested fully toward the end of February, the company gained market share across every month of the quarter.

Regarding capital expenditure, Chief Financial Officer Vivek Anand stated that the company is on track with its full-year guidance of ₹1,500 crore. In the first half of the financial year, Hero MotoCorp deployed nearly ₹600 crore toward key projects. This includes expanding capacity for the Splendor model and doubling internal combustion engine (ICE) scooter capacity to 80,000 units per month.

The company also highlighted progress in its parts and accessories business, driven by a previously announced investment of ₹700 crore to set up a new automated parts center. This facility aims to double parts handling capacity at its second global parts center to serve both Indian and international markets.

On festival sales performance, Chitale reported a 24 percent growth in sales over a broader comparative period that accounts for pre- and post-GST implementation cycles. He noted that the company has not experienced any market share erosion during this timeframe.

Hero MotoCorp's EV brand, Vida, recorded operational growth during the quarter. Retail volumes rose 74 percent year-on-year to 66,000 units, supported by a monthly production ramp-up to 30,000 units in September. The brand also achieved gross margin positivity during the quarter alongside a ₹70 crore optimization of spends. Additionally, the company confirmed that 70 percent of its EV portfolio received production-linked incentive (PLI) benefits during the quarter, with certification for nearly 100 percent of the portfolio secured earlier in the month.

"Hero MotoCorp's strategy to sustain capital expenditure and growth investments during margin pressures reflects long-term business confidence. For manufacturing and automotive enterprises, protecting market share and scaling EV infrastructure require a balance between operational efficiency and continuous reinvestment. Maintaining disciplined unit economics, as demonstrated by the Vida brand's gross margin positivity, is critical while scaling new segments in a competitive market." — Dr. Shishir Gupta, Founder & CEO, StartupLanes