Hero MotoCorp Ltd (NSE: HEROMOTOCO) Q4 2025 Earnings Call dated May. 14, 2025
Corporate Participants:
Umang Khurana — Chief Risk Officer and Head Investor Relations
Vikram Kasbekar — Executive Director, Acting Chief Executive Officer and Chief Technology Officer
Vivek Anand — Chief Financial Officer
Ashutosh Varma — Chief Business Officer
Ram Kuppuswamy — Chief Operating Officer
Analysts:
Vivek Kumar — Analyst
Vipul — Analyst
Chandramouli Muthiah — Analyst
Amyn Pirani — Analyst
Pramod Kumar — Analyst
Sonal Gupta — Analyst
Kapil Singh — Analyst
Gunjan Prithyani — Analyst
Amit Hiranandani — Analyst
Raghunandhan — Analyst
Mihir Vora — Analyst
Pramod Amthe — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Hero MotoCorp Q4 and FY25 Earnings Conference Call hosted by ICICI Securities. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes [Operator Instructions] Please note, that this conference is being recorded.
I now hand the conference over to Mr. Vivek Kumar from ICICI Securities. Thank you. And over to you, sir.
Vivek Kumar — Analyst
Thank you, Manav. Good morning, everyone. On behalf of ICICI Securities, I would like to welcome everyone on Hero MotoCorp’s Q4 and FY25 earnings call. I would like to thank the management of Hero MotoCorp for giving us this opportunity to host a call.
Now, I would like to hand the call to Mr. Umang Khurana, Chief Risk Officer and Head Investor Relations. Over to you, Umang. Thank you.
Umang Khurana — Chief Risk Officer and Head Investor Relations
Thank you, Vivek. Thank you for hosting us. Hello, everyone. You may all have noticed that we have postponed our Investor Day. We believe it to be respectful and prudent. We shall come back to you on this.
On the call for us today, we have Mr. Kasbekar, our Chief Executive Officer; our CFO, Vivek Anand; India Business Head, Ashutosh Varma. We will begin with the call, Mr. Kasbekar’s comment on the call and then Vivek will have his opening comments as well. After which, we will open this for questions and answers.
Mr. Kasbekar, could we begin with your comments, please?
Vikram Kasbekar — Executive Director, Acting Chief Executive Officer and Chief Technology Officer
Thank you, Umang, and welcome to everyone to the Hero MotoCorp Limited’s earning call. We hope you all are keeping safe. We salute our armed forces for protecting the nation and keeping us all safe.
Now moving on to business. I’m sure, you must have seen our strong quarterly performance. We ended the full year FY25 blocking our highest ever top line and bottom line. I’m happy to report, that we have retained our leadership as the world’s largest manufacturer of motorcycles and scooters for 24 consecutive years.
Let me start with the overall economy. While there is an ongoing global turmoil due to the border situation, trade tensions, on the domestic front the economy has started on a positive note driven by tapering inflation, lowering interest rates and income tax cuts, and expectations of a better monsoon.
With regards to two-wheeler industry riding on the way of a positive economic momentum, two-wheeler demand is shaping up nicely boosted particularly by a strong marriage season in May and June. Overall, we expect the industry to grow in the mid and high single-digits in FY26.
Key business highlights for quarter four FY25, in my first call I had talked about our medium to long range term strategy and my focus will be on execution. Let me now talk a bit on some of these.
On VAHAN, we have retained the number one spot during the quarter and on the full year basis. For the first four months in the calendar year, we have gained month-on-month market share. We have seen a strong bounce back in the entry segment also. In the 125 motorcycles on the back of extreme 125, we continued to outperform the category. We launched two scooters in the quarter, Xoom 125 in the sporty segment, 125cc category and Destini 125 Xtec in the commuter segment category. Both have been received very positively in the market. Our latest launches in the premium segment Xpulse 210 and Xtreme 250R are have seen very good responses.
Global business has grown at 43% 2x of the industry growth. Our strategy of focus in the top 10 markets is starting to work well. In the EV business we gained market share during the quarter and exited March by — at 7%. The EV business is on a sustained growth curve helped by investments behind the brand, brand building, pricing interventions and launch of the VIDA V2 scooter. In 30 markets cities, we have grown by 20% and in 60 markets we have grown by sorry cities we have grown by 10%.
Lastly, I want to reiterate that my focus will be on implementing our strategy to win and gain market share.
Over to you Vivek.
Vivek Anand — Chief Financial Officer
Thank you, Vikramji. Good morning, all and thank you once again for joining the call today. I’m pleased to report strong financial performance of Hero MotoCorporation for the fourth quarter, financial year ’25 and full year 2025, driven by disciplined fiscal management and focused strategic execution.
Firstly for the quarter. The Company recorded quarterly revenue of INR9,939 crores, EBITDA of INR1,416 crores and PAT of INR1,081 crores. The Company reported quarterly revenue for parts, accessories and merchandise business at INR1,553 crores a year-on-year growth of 11%. The EBITDA margin during the quarter for ICE business stood at 16.1% driven by mix improvement, lower material cost and deep savings, while we continue to invest behind brand building and new business.
During the quarter, after taking into account the investment behind EV business approximately INR143 crores, the overall EBITDA margin stands at 14.2%.
I’ll now move to full year ’25. We achieved the highest ever revenue from operations and PAT. Revenue stood at INR40,756 crores up 9%, EBITDA of INR5,868 crores up 12% and PAT of INR4,610 crores, a growth of 16%. ICE EBITDA margin at 16.2% improved by 90 bps driven by mix improvement, price and cost savings. During the year, after taking into account investments behind EV business approximately INR630 crores, the overall EBITDA margin improved by 40 basis points to 14.4%.
Our continued focus on cash management resulted in delivering strong cash from operations, strengthening our financial performance. I’m happy to share that the company has declared a final dividend of INR65 per equity share including the interim dividend of INR100 per share, the total dividend for ’24,’25 financial year amounts to INR165 per equity share representing a payout of 8250%.
We continue to maintain market leadership with sales of 5.9 million vehicles in the financial year ’24, ’25. Further, we maintained our market leadership in the 100cc category in both entry and deluxe segments and we have rapidly gained market share in the 125cc segment driven by success of Xtreme 125R. In global business as well, we continued our strong performance reporting our highest ever quarterly market share.
Overall, our dispatches in financial year ’25 grew by 43% year-on-year, almost 2x of industry. This performance was broad-based as almost all our key markets including Bangladesh, Colombia, Nepal and Mexico grew.
As part of a planned operational strategy, the Company implemented a temporary production halt from April 17th to 19th at its Dharuhera, Gurugram, Haridwar and Neemrana facilities to facilitate supply chain alignment and conduct scheduled maintenance and infrastructure enhancements. Production is expected to normalize during this month. It is important to clarify here, that we continue to grow our retail sales during the current quarter.
Moving ahead, we’ll continue to invest behind growth. We remain consistent in our commitment towards investing behind premium scooters and EV portfolio and to improve customer experience in stores with Hero 2.0 and PREMIA. Diversifying our portfolio into adjacent categories is a key part of our strategy. I’m happy to share this quarter, we acquired 34.1% stake in Euler Motors for an investment of INR510 crores, which makes Euler Motors, an associate company of Hero MotoCorp. Through this, we have marked our entry into the fast growing EV three-wheeler. We are excited about the prospects of growing this business.
I’m also happy to inform that Ather Energy, our associate company is now listed on the National Stock Exchange. The capital raise allows Ather management to accelerate their growth. We are positive about the growth prospects of two-wheeler industry and with the continuity of demand and recovery in the broader two-wheeler market for us both rural and urban, ramp up of 125cc portfolio, new product launches and strong investment behind brand power brands, we expect to grow ahead of the industry.
Thank you for listening to me and on this note, let me open the floor for Q&A. Over to you, Umang. Thank you.
Questions and Answers:
Operator
Thank you very much sir. We will now begin the question-and-answer session [Operator Instructions] We have a first question from the line of Vipul from HSBC. Please go ahead.
Vipul
Yeah. Hi. Thank you for taking my question. So my question is from next five, 10 years perspective. Now looking at the future prospect of premiumization, Hero still have close to 80% market share in the population of entry level motorcycles and inherently Hero has been a strong customer base, who will upgrade in the future? Who will upgrade in future? So Xtreme 125 has been a success but it was more of a catching up with the competition. So how do you plan to capitalize on your strong base and gain market share in the 125cc segment over next five to 10 years? That would be my first question.
Ashutosh Varma
Can I take that?
Vikram Kasbekar
Ashu, please take that.
Ashutosh Varma
Hi, Vipul, thank you for the question. We’ve had some very strong gains in the 125cc category this year. On a full year basis, we gained close to 250 basis points in terms of market share. Xtreme as a brand, if you see only on 125R we sold close to 300,000 units, overall Xtreme portfolio since it’s been there is touching close to 0.5 million units already. The kind of response that we have received on the product also gives us a lot of confidence that this brand overall will become much stronger. The more recent launch of Xtreme 250R has also met with some amazing response and we’re very confident it is on the way to become a power brand in itself.
125cc, we’ve been very strong dominant players in this category over the years. We are recovering very strongly and last year is a testimony of this. We have exciting product launches that we have in this category which will make us even stronger. We are confident that, we will gain share and move towards leadership.
Vipul
So are you suggesting that we will be looking at more product launches in 128 category near future?
Ashutosh Varma
Yes, as per market need, we have an exciting product lineup that’s planned for the future.
Vipul
Okay, thanks. Sir. My second question pertains to the vehicle quality. So again, it’s from like feedback from last five years post BS-VI. So the feedback we got from the channel VI is that of lately there has been some issues with the quality and although, a lot of issues have been addressed in past like within two years or three or the launch of the launch of BS-VI models, but still Hero is known for its quality in the entry level.
So and second feedback we got was that when you started like in 2017, ’18, you started with innovation plus margin expansion program but eventually what we realized that it moved you only to the margin expansion while there was some degradation in the quality which happened. So and that is also reflected in kind of warranty queries coming to the dealers. So how do you plan to address like we are now, we are seeing that changing leaderships also happening to the company. Is there any way we can track like improvement in the quality and the brand value of the models?
Vikram Kasbekar
Ram, can you take that?
Ram Kuppuswamy
Sure. Hi, this is Ram, here. I’m the Chief Operating Officer at Hero MotoCorp. To answer your question, firstly, we pride ourselves at Hero at having products that work for our consumers and last with our consumers over many many years. The quality of our products is paramount to us and our brand is built on the strength of the incredible value and quality that we deliver to our customers over the years.
We have not seen a drop off in any of those levels and we pride ourselves in making sure that, the products that leave our factory and go to our dealerships and go to the hands of our consumers have quality levels which are of the highest level in the industry and we’ll continue to maintain that standard. We will not allow for any drop off on that front. And I must say, that all of our products in our portfolios have seen the strong reception that they have because of the quality levels that we maintain with them.
Vikram Kasbekar
And Chandra[Phonetic] going forward we are using technology for our development of our products in the R&D and addressing all quality issues at 360 degrees with the quality of customer experience, quality of manufacturing and quality of design. So all the areas we are strengthening ourselves very well.
Vipul
Sure. Thank you, sir. Thanks for that.
Operator
Thank you. We have our next question from the line of Chandramouli from Goldman Sachs. Please go ahead.
Chandramouli Muthiah
Hi, good morning and thank you for taking my question. My first question is just on the comment you made earlier around mid to high-single-digit growth in the industry. So just want to clarify that that’s volume growth for the industry and just a follow up to that, if you’re able to share what Hero’s expectation is for FY25 in terms of volume? I mean [Indecipherable] I think you’ve spoken about revenue. I just want to understand those individuals in details.
Ashutosh Varma
Hi, Chandra, if I got a question right, you wanting to know a little bit more on what our projection for the industry is and how is Hero thinking about its volumes?
Chandramouli Muthiah
That’s right. That’s right.
Ashutosh Varma
Okay, thank you. Thank you for the question. So overall, this year we expect the industry to grow in the region of around 6% to 7%, pretty much the same as last year. I mean we have a lot of tailwinds this year, we have a good monsoon prediction, we have good marriage season after a long time and the initial signs are already visible. We’ve seen some income tax relief that should put in more money in the hands of consumers. A lot of government spending that’s happening. I mean the inflation is lower. So we expect the industry to be, to be better that way. Of course, there are a little headwinds as well in terms of what’s happening in terms of OBD II and the price increase that’s happening therein, but overall we expect the industry to be in the region of around 6% to 7%.
We on the other hand, we’re very confident of our performance. We have some launches that happened in Q4, that are yet fully to manifest in terms of volumes and we are very confident, that we’ll outpace the industry growth and gain share.
Chandramouli Muthiah
That’s helpful. My second question is just around channel inventory. So I think in the prepared remarks, we did mention that we did some scheduled maintenance that some of us in the month of April, which is caused growth like feedback, wholesale growth, specifically for the month by a decent content. So just want to understand, now after that event, where we would be in terms of channel inventory in maybe number of weeks are we at four, five, six weeks? Just want to understand that also.
Ashutosh Varma
Chandra, after this our, I mean we were sufficiently covered. Our channel inventory currently stands around four to five weeks, but inventory is always forward-looking. We know that, as we gear up for the festive season we will be able to step it up in accordance with what we expect out of the festive season, but we are sufficiently covered in terms of inventory currently at four to five weeks.
Chandramouli Muthiah
Got it. That’s helpful. Thank you very much and all the best.
Operator
Thank you. We have our next question from the line of Amyn Pirani from J.P. Morgan. Please go ahead.
Amyn Pirani
Yes. Hi. Thanks for the opportunity. My first question is also on this inventory. So should we understand, that four to five weeks or maybe four weeks is kind of a normalized level that you’re looking at going forward? Some sense would be important. And secondly, you mentioned that you had done a lot of launches in 4Q and while obviously the wholesale were corrected and retails are picking up gradually, any initial sense if you could give as to what is the response to maybe the Destini 125 or the Premium Motorcycle that you have launched and what kind of numbers you are expecting to ramp up over the next maybe few months?
Ashutosh Varma
Hi, Amyn. Thank you very much. Good to hear you again. Hope you’re doing well. Overall, from — I mean if you look at the performance for last month in terms of VAHAN registrations, we had crossed 5 lakhs. We are increasingly focused — focusing on retail as the key metric for performance. A channel inventory of anywhere between four to six weeks is our — is the normal level that we would want to operate in. I mean depending upon the season, we might just take it up a little notch but subsequently come back to the same levels that we want to operate on.
As I said, we’ve launched some products in quarter four, met some with some amazing response, you would have seen our scooter market share inching up by almost 140 basis points basis the new launches that we’ve had. We also have launched the Xtreme and Xpulse the order pipeline, booking pipeline is extremely strong.
As I said, they are yet to manifest fully and as we move into quarter one and towards the festive, we will see this taking full shape and confident that these will help outpace the industry in terms of growth.
Amyn Pirani
Thank you, Ashutosh. Good to hear from you as well again. Second, I had a question on the numbers, we have been sharing this investment into EVs and what it does to our overall margins and thank you for sharing that. Is there a broad, target as to by when we would want these EV losses to maybe turn break even? Is that a target or is that not something that we should be thinking about at the current stage?
Vivek Anand
Thanks, Amyn. Vivek, here. No, you’re absolutely right. I think clearly. Yeah, I think you’re right. We’ve been transparent in terms of sharing the numbers. Absolutely right. I think this year, if I really look at our EV performance, our volumes have grown 200% and our EBITDA for EV business is at minus 95%, which I — when I compare with our performance in ’23, ’24 has improved from 155% EBITDA negative to 95%.
So as we really look forward, our priority is very clearly to grow volumes to scale up the business and to really grow market share, right. Having said that, we will continue to improve on our profitability as we go forward.
So if you’re really asking me in the near-term is there that I am really looking for? And as I said, I’m really looking for growing volume, scaling up and market share, but having said that, I continue to really drive the business with lot more efficiency, right? What will really make this business profitable is our — the scale up, which we talked about, the BOM, cost reduction through localization, right? PLI benefit realization, right? These are the things which will really help me, right, improve the profitability of the business going forward and also what I want to really add is that, at a 25,000, 30,000 levels of volume per month, we hope that this will break even, which in our view is couple of years away.
Amyn Pirani
Okay. Okay, understood. Thanks for that color. I’ll come back in the queue.
Vivek Anand
Thanks, Amyn.
Operator
Thank you. We have our next question from the line of Pramod Kumar from UBS Securities. Please go ahead.
Pramod Kumar
Yeah. Thanks a lot for the opportunity, sir. My first question is on your guidance on outperforming the industry. The reason why I’m asking this is, we had the same optimism and sentiment last year. We probably claimed to have the best launch pipeline and the retail growth for the industry was 8% and we grew our retail by 1%. So what gives you the confidence that, this year with slightly lower industry growth and not as actionable launch by finance last year, how do we expect to kind of outperform the industry on retail growth and then linked to that, what would be the linkages of that on the margin aspirations as well? If you can just help us understand, why we have kind of underperformed the industry last year so badly and why are we so confident of overcoming all of those and outperforming the Industry? What are you seeing on the ground and what are the likely read across for margins from that strategy?
Ashutosh Varma
Sure, Pramod. Thank you. I’ll let the margin question be answered by Vivek, but allow me to come back on the first part of your question. The confidence comes from the delivery that we’ve had in quarter four. So if you look at the performance that we’ve had in quarter four in the entry category, we gained 600 basis points in terms of market share. The confidence comes from the fact that we — over the year, we have recovered on 125cc strongly gained 250 basis points there. The confidence comes from the fact that the new scooters that we have launched in the market have met with some amazing response. It led to increases in market share in the later part of quarter four and also retail growth.
That said, we are also working on as industry leaders, we know in the core category our work is to expand the category. The fact that we have one lakh customers reporting into our workshops every day gives us an excellent opportunity to work on upgrade and own base marketing. So these are fundamental strengths that we have that we increasingly leverage this year and we are very confident this will help us move in terms of market share outpacing the industry growth.
Umang Khurana
Yeah. So just following that up India business, therefore there is the rural recovery is well underway. That makes the number of new launches, India business growth. You also looked at our export growth Pramod, that is double the industry export growth as well. Our emerging mobility business unit, our EV business has grown far ahead of this total rate as well. So when you looked at this, every month sequentially there is growth. When you look at VAHAN, that is where we are coming back from to say that there is an opportunity that we are starting to all the building blocks are in place. We now need to implement and that’s what Mr. Kasbekar talks about.
Vivek Anand
Thanks. Thanks, Umang. Hi, Pramod, Vivek here. I think as Ashutosh and Umang said, I think we had a great start, I’ll say to the year. I think we are gaining one share for the last four months in a row. I think the growth is clearly broad-based. We are seeing that in our Indian business, we are seeing it in global business and we are seeing it in the EV portfolio, right. Having said that, on your second question on margin, I must start by saying that, we will continue to invest behind growth and we have given a guidance to the market of maintaining our EBITDA margins between 14% to 16% and directionally, we Will be there.
Pramod Kumar
And sir, when you talk about market share, you’re talking about YoY market share trends or sequential market share trends, because it’s a seasonal industry, as we all know, so, because when I look at VAHAN, the YoY market share, there’s been a decline since January to April. Correct me if I’m wrong there, please. Unless you’re referring to sequential market share. Am I right?
Ashutosh Varma
Referring to sequential, Pramod. But also.
Pramod Kumar
Yeah.
Ashutosh Varma
I mean, I think may it’s translating into YoY as well.
Pramod Kumar
Okay, so out of five months, four months, it’s a sequential gain, YoY one month. Okay, fair enough. I look forward to that outperformance. And last question, the leadership transition. If you can just help us understand, how are we placed there as to, because there are, there has been reasonable attrition at the top. So just trying to understand, by when do we expect to have a full time active CEO at the Company?
Vikram Kasbekar
Thanks. Thanks, Pramod. I’ll ask to take that.
Ashutosh Varma
So, Pramod. Right. So, Mr. Kasbekar, he’s the acting CEO and he’s fully on the job. Right. So he’s the one who’s currently driving the business and we’ll come back to you as we have more to share.
Pramod Kumar
Thanks a lot. Thank you. Best of luck.
Operator
Thank you. We have a next question from the line of Sonal Gupta from HSBC Asset Management. Please go ahead.
Sonal Gupta
Yeah. Hi, good morning. Thanks for taking my question. First, I just wanted to get a sense on, right like the non-vehicle revenue part for this quarter. I mean like even adjusting for spares, right like our ASP is sort of looking much higher on a sequential basis. So could you just highlight, are there any other larger amount of non-vehicle revenue or other stuff, which has sort of boosted the revenues for this quarter?
Vivek Anand
No, I think large part — so there is a, there is a revenue per unit growth of almost 4% year-on-year and that’s largely driven by two-wheelers and parts business, right.
Sonal Gupta
Okay. Okay. No. So on a sequential basis, like our ASP is up big time. So I’m just — is that just a mix effect or are there some other drivers there?
Vivek Anand
Yeah, it’s largely the mix effect. Yes, you’re right. So we are, we’ve increased our revenue per unit both year-on-year and on quarter-on-quarter. Specific to your question, on quarter-on-quarter which has increased by 2,236, right. It’s largely the two-wheelers contributing to two-third of it and the balance coming from spare part business.
Sonal Gupta
Okay. Just the other thing was on like, we had this production issue and somewhat uncharacteristic for Hero. So just wanted to — I mean, could you give some more color into that? Was it some supplier related issues and which sort of related led to the disruption or I mean because we had three plants down. So I’m just trying to understand.
Ram Kuppuswamy
Sure. This is Ram, here. So as you know last month we had a planned production haul at four of our factories in Dharuhera, Neemrana, Gurgaon and Haridwar. The primary driver was to realign the supply line, but also we had scheduled maintenance and we made some infrastructure investments and upgrades that we wanted to. This did go on to impact unfortunately some of our dispatches in April, but I’m happy to share that we are at full strength in May, and there was no real retail impact, but I’ll let Ashu maybe speak to the retail impact of the shut down.
Ashutosh Varma
So of course, I’m said this before. Last month in April, we clocked over 5 lakh in VAHAN registrations. In spite of last year, April being heavy in terms of marriage season and festives, there has been no retail impact whatsoever, we are sufficiently covered and as it improves going further we will be sufficiently covered for the festive as well.
Sonal Gupta
Got it. And just two more questions. I’ll just put them in one line. One was on the financing side. I mean, we’re getting some mixed responses in terms of where the, I mean two-wheeler financing is becoming tighter, especially within the entry level portfolio that we have. Are we seeing any of that? And just also if you could give some more color on what is the export outlook for FY26. Thanks.
Ashutosh Varma
Yeah. Hi. I just wanted to quickly come on the financing side of the business. So overall our retail finance penetration for the quarter four was in the region of 59%. For the full year, it was at 63%, but this is a seasonality that comes into retail finance pretty much in quarter four. We were same at, at the same level last year. So at a penetration level, we haven’t seen an impact. Yes, the nature of the products have changed a little bit, because of certain stress that some of the finances have seen, but I guess there is a lot of innovation that’s coming in there in terms of different kinds of schemes that are available.
I think with the easing of interest rates, we expect low EMIs to become a larger part of the overall basket of products. But again as I said, seasonality fundamentally nothing that we should be too wary about.
Vivek Anand
And just to add to what Ashutosh said, I think our finance penetration currently is around 65% almost in line with last year. So we’ve not seen much of a shift there, just to add.
Vikram Kasbekar
On the global business, our strategy of making products specific to countries in LATAM, Bangladesh, Nigeria is yielding very good results which is evident from the last year’s performance and going forward, we are quite aggressive on the growth in the GB segment.
Vivek Anand
And to add and to supplement, I think this year, we had a fantastic performance of growing 2x of industry. I think clearly our 80-20 strategy is working well. Our top 10 markets continue to grow well. We have re-entry in Nepal, entry in Sri Lanka and Philippines, that’s really going to contribute to our growth as we get into ’25, ’26. So we are really confident about growing our global business and continue to gain market share in ’25, ’26.
Sonal Gupta
Thank you.
Operator
Thank you. We have our next question from the line of Kapil Singh from Nomura. Please go ahead.
Kapil Singh
Hi, sir, can you — let me know what is the spares revenue for the quarter?
Vivek Anand
It’s INR1,553 crores which has grown by 11% year-on-year.
Kapil Singh
Sir, this has been growing quite well for last few years actually. So could you share some insights here? What is driving this growth? In fact, the growth has been well ahead of the volume growth [Indecipherable]
Ashutosh Varma
Yeah. Hi, Kapil, thank you very much for that question. I mean part’s business growth has something that we have looked back with pride over the years. In fact, there is a lot of fundamental work that has gone into where we are today. I mean there is a lot of work that has happened in terms of scaling up the networks. So we are much more deeply penetrated today than what we were earlier, especially in the aftermarket we worked also at our existing workshops, but more so in the aftermarkets where we have penetrated deeply.
We have expanded our portfolio. I mean, when it comes to accessories, we’ve added new product lines like the tires and the batteries. So all this adding up to the consistent performance that you are seeing today.
Vivek Anand
And also to add to what Ashutosh said. So while we are, we had a good track record of almost hitting double-digit growth and that’s what certainly we are looking at as we look into the current year. While we look to really grow this business, we continue to grow this business profitably is what I wanted to add.
Kapil Singh
Okay. Thanks, sir. And second, I wanted to check on VIDA. Where are we in the PLI approval cycle?
Vivek Anand
So for VIDA Pro, we have just filed our PLI application. I think we expect the approval to come in by July and I think other products, we are in the process of filing the application.
Kapil Singh
Okay. Also one question I had on Euler Motors, we have taken a 34% stake there. So, could you share some parts here that, why not a majority state if you are looking at this as a new segment that you want to enter.
Vivek Anand
Yeah, so I think you’re right. So we required 34.1% stake in Euler and I think first of all what I really want to say is that, three-wheeler presents an attractive alternate adjacent category for us to really diversify, which is part of our strategy and I think we talked about it in the past, right. I think as a category it offers us large value pool, right. It’s a segment in terms of size, revenue size it’s INR17,000 crores in last financial year, 6.4 lakh units and this is projected to grow to INR22,000 crores in the next five years.
Also it provides an attractive profit pool of INR2,300 crores and this category has a EBITDA margin of 20% plus yeah. We are seeing rapid electrification in the three-wheeler category and we believe, this is the right time for us to really enter, right. I think this category is driven by favorable government policies, TCO benefits versus diesel of almost 40% to 50% and current electrification at 22% offers headroom for all of us to really grow our share in the respective category, right. So at this point, I think if you really look at our investments in the past, right supporting the enterprise in the long-term has really created value for us like we’ve done, say in the past and we strongly believe that this model which has worked in the past will continue to do well for us going forward in case of Euler.
Kapil Singh
Thank you.
Operator
Thank you. We have our next question from the line of Gunjan from Bank of America. Please go ahead.
Gunjan Prithyani
Hi. Thanks team for taking my questions. I had a few clarifications. On the ASP increase quarter-on-quarter, which you covered earlier. Is there an element of OBD price hike that’s captured there and if you could sort of just quantify that.
Vivek Anand
OBD price increase. Yes, we’ve taken almost 2% which is almost the case in the industry.
Umang Khurana
Gunjan, this is a similar price hike across the industry. Yeah, but if your question is how much of that is baked into the Q4 numbers? The Q4 numbers has very little of it because this was phased out over the months and model-on-model. So very little impact in the Q4 ASP increase. Yeah.
Gunjan Prithyani
Okay, got it. So, so the large part of ASP is, is essentially mix because when I look at the entry executive et cetera mix, that’s not changed materially. So is it within the models that the what we are selling is probably, higher variants or higher price points within that. Is that the way I should be thinking about ASPs? Because it’s actually seen quite meaningful increase over the last couple of quarters. I don’t think it’s just quarter four, but right from Q1 to now, there has been quite a step up in the ASPs.
Vivek Anand
Yeah, so you’re right, Gunjan. I think compared to last year, our ASPs have grown by 4% and as I explained earlier, large part of it is coming from mix improvement within the segments — product segments and a part of it from price. So two-thirds coming from mix and one-third coming from price. By and large, I think that’s what you can really take. And as we clarified OBD II price increase is something which is effective April. You will see the impact of that in quarter one.
Gunjan Prithyani
Okay, got it. And the other clarification that I was looking for all was this, difference between the subs in associate profitability which is quite decent in this quarter. I think roughly around INR80 crores or so. Can you just share some color on, what you know we’ve — this has been in losses for last couple of quarters. So what’s really contributing? Is there a one-off here or any turnaround in the, in the associates that’s captured there?
Vivek Anand
Gunjan, you will have to re-clarify the question. Just be more specific on. Yeah. For the quarter, for the full year, what, what is the question?
Gunjan Prithyani
It is for the quarter, if I look at the subs contribution, which is I think captured as profit from associates in the consolidated P&L, that’s actually a positive number, a reasonably positive number. I think INR70 crores or so, which has been in losses for last couple of quarters. We’re just trying to understand, what’s really changed there or is there some, some mark-to-market or something there.
Vivek Anand
Yeah. Yeah. So you’re right. So let me just explain that. So you’re right. So we, yeah there the number has always been a lower number. At this time, we had a one-time gain of CCPS conversion to equity, right in case of April, and that has translated into a one-time gain of INR170 crores. So that’s, that’s the one which is really inflated the profitability in our consolidated results for the quarter and for the full year.
Gunjan Prithyani
Okay, got it. That’s clear. And last question on the.
Operator
Sorry to interrupt, ma’am. May please request you, you’ve two questions are up.
Gunjan Prithyani
Okay. All right, thank you so much.
Operator
Thank you. We have our next question from the lineup Amit Hiranandani from PhilipCapital. Please go ahead.
Amit Hiranandani
Yeah. Thanks for the opportunity. See this margin improvement journey in coming two to three years and do you see any risk due to rising EV and export mix?
Vivek Anand
So I don’t see a risk. I think this is a very conscious investment the company has decided to really make, right in the next, I’ll say, a couple of years near to middle term, right. So I don’t see a risk to that. I think what is important for us to really is to really scale up the business, scale up the business fast, grow it profitably, right. So we will continue to grow our business and reinvest in EV, I think that’s the strategy and therefore our margins will continue to be in the range of 14% to 16%.
Amit Hiranandani
Right. In the first two months of this fiscal and your outlook for these in urban, rural separately for this fiscal case.
Ashutosh Varma
Amit, hi. So I mean what we, what we expect this year is because the earlier answer that I had given the prediction of a better monsoon, a good marriage season, increased government spending in the rural areas, lower inflation, all that we expect will work in favor of rural. I mean, our rural contribution is in the high 50s. We expect that to be as strong. In fact, expect good rural growth coming in this year overall. Also just wanted to add here, that I mean we are very confident since we have a product lineup, that’s strong in some of our base categories. As the segment grows bigger, we’ll be able to outpace in terms of the industry growth as well.
Amit Hiranandani
If I can ask net worth of Hero FinCorp, please as on the 31st of March, please. That’s it. Thank you.
Umang Khurana
We’ll take that offline.
Vivek Anand
Yeah, we’ll share with you separately that number.
Amit Hiranandani
All the best. Thank you so much.
Vivek Anand
Thank you. Thanks, Amit.
Operator
Thank you. We have our next question from Raghunandhan from Nuvama Research. Please go ahead.
Raghunandhan
Thank you, sir for the opportunity. Firstly, on the 100cc motorcycles, the industry volume and Hero volume has seen some decline in last two quarters. How do you see the volume expectations for this segment going forward? What are the drivers?
Ashutosh Varma
Raghu, hi. I mean for the 100cc in the entry category of course, there was for the last few years stress at the bottom of the pyramid, which is why this segment had probably seen a little more stress than some of the other segments. Quarter four, I mean we had seen an impact across categories not only increase, I mean if you look at the delta shift from how these segments were growing versus how quarter four behaved, you saw a blip across categories. So, we really can’t single out the 100cc category just by itself.
That said, I mean we are a very dominant player in this category. In the 100cc we operate with almost a 90% market share. Year-on-year, we’ve had a 600 basis points increase in terms of entry market share. So here, our job is to expand the category and this is where we are going to be indexed upon. I mentioned in my earlier comment, that we have the largest base of customers. We have almost four crore customers visiting our workshops every year. So there is a lot of own base work that can possibly happen here in terms of upgrades. There is a lot of finance related actions that we continue to do and there are innovations, especially in terms of digital finance that we are trying to bring about which will make affordable and inclusion much easier.
So we are confident that this segment on the back of rural coming back much stronger this year will do well and help in overall growing of the 100cc industry led by us of course.
Raghunandhan
Thank you, sir. Secondly, in terms of new products, if you can talk a bit more about on the EV side products like Vida Z, when can we expect these products and any other launches you want to highlight for FY26. Thank you.
Ashutosh Varma
Okay. Our existing product has been received very well and you can see the volumes are anywhere going from 7,000 to 8,000 on a monthly basis. Very shortly we are launching an upgrade, which will be far better in terms of the value proposition to the customers and it will come with launch in July, and of course, that will be addressing the basic customer requirements across the segment.
Vivek Anand
So yeah, just to add on the new launches, I think there is clearly as we talked about, I think we had a great exit to the year, we exited with a market share of 6% plus. I think the launches we had in the second half of last year, they continue to do well. In addition to that, we are planning two new affordable products in first half, most likely in July and that will continue to really strengthen our product portfolio, which will help us really drive our growth, accelerate our growth and help us gain market share.
Raghunandhan
Thank you, sir. So both the affordable products will be in the EV side, right?
Vivek Anand
That’s right, we are talking of EV business. Yes, that’s it.
Raghunandhan
Yes. Lastly, how do you see the collaborations synergies playing out with your partners? In terms of be it Ather, Zero Motorcycles or Euler? How do you see that, joint efforts happening and how can it benefit the company over the near-term, medium term? If you can talk about it.
Vivek Anand
No, I think very clearly on the Ather side, I think clearly it’s a long-term investment we’ve made. I think we really like the enterprise and we really continue to stay invested in that. Euler, we just, it’s just a start of the relationship. I briefly talked about, it’s a very exciting category. It’s a very exciting business. I would say, we have a very experienced team in Euler, right. Which is a very good mix of young professionals and experience from industry, right. We have a very differentiated product, right to offer in the marketplace. So we are really, really excited working with the, the new team as we really go forward.
Vikram Kasbekar
And we have this synergy with Ather on the charging infrastructure. So we are sharing the same. Added to that on zero front, is the technology at the higher voltage which is what we are absorbing, which will have a very good future as the time passes.
Raghunandhan
Wishing you all the best.
Vikram Kasbekar
Thank you.
Operator
Thank you. We have our next question from the line of Mihir Vora from Equirus. Please go ahead.
Mihir Vora
Yeah. Thank you for taking that question. So my question was on HF Deluxe. Basically, if we see the FY19 volume, then compare it with FY25. The HF Deluxe has seen a major drop here, while your Splendor has been something which is sort of a flattish or either it has grown. So what is it that, the HF Deluxe demand has been so impacted. Are the customers moving to Splendor or can you throw some color on it?
Ashutosh Varma
So, Mihir, hi. Thank you for that question. In fact, what you witnessed from FY19 to FY25 in the middle of that was huge disruption that happened in the industry. There was COVID, which impacted disposable incomes to a great extent and also BS-VI transition that happened which increased bike prices substantially across categories and across all industry players.
What we saw was a lot of customers at the bottom of the pyramid coming under large affordability stress. Used two-wheelers for a example, which used to be one is to one of new two-wheeler sales post COVID, immediately post COVID actually rose to close to 1.5 is to 1. I mean there was substantial number of people who held onto their bikes longer. Our workshop data suggested that, people owning HF Deluxe were not replacing as frequently as they were earlier. So we had vehicles in our workshop five years and above, it increased significantly.
So we knew all the while that it was just a matter of time before it will come back. So we’ve invested aggressively in terms of augmenting the value proposition of the product, bringing in new exciting additions in this category. We’ve already seen it started to work for US from the late, from last quarter of the financial year.
Last quarter of the financial year, we also saw the replacement demand coming back significantly from almost 6% to 11% in quarter four sequentially. So we are very confident that, as we bring more excitement into this category, we will see a lot of customers who have dropped out from the mobility space coming back and opting for this and our quarter four performance is an indication of that.
Mihir Vora
Sir, soo second on this, the replacement number which you can quoted as being around 11% of the total, is it of the total volumes or how do you see it?
Ashutosh Varma
Yes.
Mihir Vora
Okay. And going ahead with the FY18, ’19 base being so high, do we expect this to go up and to what levels does normally the replacement demand peak at?
Ashutosh Varma
So, we’ve seen replacement demand to be in the vicinity of around 18% to 20%, generally we expect that it will, it will gradually bounce back to that level and of course it will also depend in terms of the innovation that people are able to bring about overall across the industry in the categories for people to be tempted enough to upgrade.
Mihir Vora
Okay, sir, and are we seeing some kind of customer moving from HF Deluxe to a scooter segment or some kind of data which we work on? Do we see that shift towards scooters yet?
Ashutosh Varma
The category drivers for both of these segments are very different. So I mean, scooters are largely into a different space altogether. This is, I mean the average running is much higher. So I would not want to draw that conclusion.
Mihir Vora
Alright. Okay, sir, that was from my side. Thank you.
Operator
Thank you. We have our next question from the line of Pramod Amthe from InCred Equities. Please go ahead.
Pramod Amthe
Yeah. Hi. Thanks for taking a question. So in the recent context of your supply chain realignment shutdown, which you took in, wanted to understand, how do you see new plant capacity versus the old plants? Because we have plants since inception, almost like 20 plus years on. Is there a scope to shift the production and bring those operational efficiency and think through beyond having that 14%, 16% margins?
Ram Kuppuswamy
So, okay, I think there were two parts to that question, so I’ll address each one. To start with, we — as we mentioned, we did temporarily haul production in four factories for three days. We as I said, are back at full strength in this month and we don’t see any going forward. With respect to the second half of your question, which is more around the new factories that we have, we are ramping them up quickly. Our factory, the last factory that we started, which is in Tirupati district, which is where we produce our EVs today, is ramping up and ramping up very well and we’ve already also announced that we will invest significantly in that side to bring up a second Global Park Center, that campus will be one of the larger campuses that we have in our network in the future.
Pramod Amthe
But is there a broader thinking in terms of realigning your capacities, so that you can get the best of the latest production technology for your profitability?
Ram Kuppuswamy
We do that on a continuous basis. I can assure you, that we are constantly looking at the mix and the different models that we produce across the different sites that we have. One of our largest trends is the manufacturing capacity that we have and the supplier ecosystem that supports it flexibly. We will look at this on a continuous basis.
Vikram Kasbekar
And just to reinforce what Ram said, even our older plants have the latest of the technologies and we continue to improve upon the manufacturing technology.
Pramod Amthe
And the second one is investment into some of the new ventures. You have been right in catching up the wave and nurturing some of the best entities within those, either if you look at Hero FinCorp or Ather to that extent. How do you look and you avoid the temptation to book profit in the IPOs, but how do you see the monetization? Would you look through for maturity of these industries to get out or would you look for the right time to make the best work? How do you look at monetizing the same?
Vivek Anand
Pramod, these are — as you rightly said, these are long term investments, right. And we will continue to really invest and work behind these enterprise support the management and create value in the long-term. That’s all I’ll say, at this point in time.
Pramod Amthe
Okay. Thanks and all the best.
Umang Khurana
Thank you. Thank you everyone. To reiterate, highest ever revenue and profits for the year. We’ve been growing market share on VAHAN, sequentially every month in this calendar year already, so happy with that as you could see from what you’re hearing from us. Increasing dominance in entry and as that market share has gone to 65% up 6% growth year-on-year. The growth in the 125cc segment with product interventions, process improvement is something that’s been helping us go forward. What will support this growth is premium and scooters as well. To your question on mix as scooters and EMBU EV does better. The new launches are in this category has us excited with the Xoom franchise, Xtreme, XPulse and the Premia dealerships as well.
Global business has had a great year. We exited the year with 9% market share. We continue to outperform the industry. You’d be pleased 40% of our exports are actually premium products. We’re closing with EV with 20% and more market share in 60 of our towns already. The focus on market share expansion network, new products and brand building is what we are doing.
With that, thank you everyone for coming in. Jai Hind. Please keep safe.
Vivek Anand
Thank you. Thank you very much.
Vikram Kasbekar
Thank you.
Operator
Thank you everyone. On behalf of ICICI security, that concludes this conference. Thank you for joining us. And you may now disconnect your line.