Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Hero MotoCorp Ltd (NSE: HEROMOTOCO) Q4 2026 Earnings Call dated May. 06, 2026
Corporate Participants:
Umang Khurana — Head Investor Relations and Risk
Harshavardhan Chitale — Chief Executive Officer
Vivek Anand — Chief Financial Officer
Analysts:
Aniket Mahatre — Analyst
Binay Singh — Analyst
Gunjan Prithyani — Analyst
Amyn Pirani — Analyst
Kapil Singh — Analyst
Jay Kale — Analyst
Raghunandhan — Analyst
Sonal Gupta — Analyst
Arvind Sharm — Analyst
Unidentified Participant
Pramod Amthe — Analyst
Sridhar Kalani — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to The Hero MotoCorp Q4FY26 conference call hosted by Motilal Oswal Financial Services Limited 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. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference has been recorded. I now hand the conference over to Mr.
Aniket Mahatre from Motilal Ojwal Financial Services Ltd. Thank you. And over to you sir.
Aniket Mahatre — Analyst
Thank you Sopnadi. Good morning everyone. Welcome to the post results conference call of Hero Motorcock. I would like to thank the management team of Hero Motocoque for giving us an opportunity to host this call. I would now hand over the call to Sartak from the industry relations team of Hero to take this forward. Over to you Sathak.
Umang Khurana — Head Investor Relations and Risk
Thank you Aniket and Sapnali. Good morning everyone and welcome to our earnings call. With us on the call Today we have Mr. Harshvardhan Chitle, our CEO, Mr. Vivek Anand, our CFO, Mr. Ashutosh Verma who is the Chief Business Officer of the India Business unit and and Ms. Kaushalia Landkumar, Chief Business Officer of the Emerging Market Business Unit. We’ll begin the call with opening remarks from Harsh and Vivek followed by a Q and A session and with that let me hand over to Harsh.
Harshavardhan Chitale — Chief Executive Officer
Thank you Sarthak and good morning everyone and welcome to the Hero Motocorp’s earning call. I’m sure that by now all of you must have seen our strong Q4 and fiscal year 2026 results. FY26 was a very strong year for us where we delivered our highest ever top line and bottom line while maintaining our leadership as the world’s largest two wheeler manufacturer for 25 consecutive years. In the previous investor call I spoke about opportunities that exist in the fast growing segments of the two wheeler industry where we are relatively under index, where we are relatively underrepresented.
And I also spoke of how we are focusing on them with a clear objective of rapidly gaining share in each of them. It’s heartening to see the results already coming through. And in these focus segments we have seen advancement in last quarter in scooters we saw 48% growth year on year. In EV, our EV scooter volumes expanded 2.5 times over the previous year. And our global business wholesale or dispatches saw growth of 41% year on year even in the premium categories. As you all know, we have partnership with Harley Davidson for certain range of motorcycles and our Harley Davidson range of bikes that we sell of, make and sell grew 26% year on year.
What’s also important to note is this is not just dispatch growth. Our retail performance actually outpaced dispatch growth and what that means is channel stock came down over the year and we are entering next year with much more healthier channel stock levels. We continue to strengthen our portfolio in FY26 with nine impactful launches and multiple key refreshes both in our ICE as well as EV portfolio. You all have probably also seen our six high impact marketing campaigns and one of them is already going on right now which is around our Zoom scooter portfolio.
Combined with these high impact launches that we did last year, we have now filled critical white spaces both in our motorcycle as well as scooter lineup. All of this translated into market share gains across 100cc, 110cc ICE and EV scooters, global business and as I mentioned even in the Harley Davidson range, the 400-500cc range where we play in Deluxe 125 segment. We did have a dip in the very first quarter of last financial year but thereafter for three quarters we’ve been gaining share quarter after quarter.
Going forward our investments in these growth segments will continue. We are investing in capacity expansion and we have committed over 1500 crores of capex in FY27 and this capex is going to expand our capacity and in scooters where for some of our models that are doing very well we are doubling our capacity in EV where in fact in a matter of a month we would double our capacity from where we started last year. And then further down the road in few quarters there will be further doubling of capacity as we are seeing great momentum for our Vida brand.
We are also making significant investment in building up a second path center which is going to help in further expansion of our parts and accessories business. So We’ve committed over 700 crore of investment in building out a global parts center in south of India. Second kind of investment that we are going to continue doing is in brand building. Last year just to call out we increased our advertising and promotion spend by 22%. So while our overall costs were controlled and you saw its impact on our EBITDA expansion in the year, despite that, despite that cost control we had a significant brand building investment that we did last year and we would continue to do so this year as well.
Third major investment that we’ll be focusing on this year is new products. In addition to nine launches that we did last year, you should expect from us this year many new exciting launches both in our Vida brand, in our premium ranges and also in scooters. So we continue to have new products coming in quarter after quarter and stay tuned for that fourth area of investment we are driving and as an organization it’s a priority for us is on technology. We are committed to our continuous investment in low emission powertrains be it for electric vehicles or also for flex fuels, different blends of ethanol.
We are also making investments in making more and more of our vehicles now connected. Already all of our electric vehicles and premium range of motorcycles and scooters are connected and over 3 lakh of two wheelers that are on the road today are connected to our cloud platform where we can monitor their performance and give rider guidance such as turn by turn navigation, diagnostic information and we are also continuing to make investments in digital technologies. You will be glad to know that we are now increasingly leveraging Gen AI for improving our customer conversion in our customer facing platform and also in reducing our cycle time of development.
All of you must have also heard about new appointment that we announced yesterday which is that of our new CTO Mr. Sachin Agarwal who would be joining us later this month and he brings with him 29 years of experience in automotive R and D and technology leadership. I’m confident that under his able leadership Hero Motocorp will accelerate its R and D transformation and build additional differentiated future ready technologies. While we are all focused on these growth drivers, we remain mindful of the evolving macro environment.
As FY27 begins, the broader economy is navigating certain short term uncertainties due to the developments in West Asia that has impacted the entire industry in terms of commodity costs, be it cost of metals, cost of gas or in the recent past also we’ve seen increase in certain labor costs. Despite all of these headwinds, I’m pleased to report that we navigated our supply chain with no disruption at our plants as well as our suppliers, reflecting resilience and strength of our operations. On the demand side, two wheeler sector has started the year on a positive note, continuing the momentum that we saw in the second half of FY26.
With this, let me hand over to Vivek for a more detailed review of our quarterly financial performance and then we’ll throw the call open for Q and A.
Vivek Anand — Chief Financial Officer
Thank you Harsh. Good morning to all of you. I would like to thank everyone for joining the call today I’m pleased to report a strong financial performance for Hero MotoCorp for the fourth quarter and the full fiscal year 2026. Regarding our quarter four financial year 26 performance, the company achieved its highest ever quarterly revenue of Rupees 12,797 crores representing a 29% year over year growth. This top line momentum contributed to robust operational results with EBITDA reaching an all time high of rupees 1856 crores up 31% year on year and PAT reaching 1401 crores up 30% year on year, ICE Business EBITDA margin in the quarter expanded by 100 basis points year on year to 17% driven by pricing, leap savings and operating leverage.
After taking into account the investments behind EV business of rupees 220 crores, the overall EBITDA margin improved by 30bps to 14.5%. Coming to the performance in fiscal year 2026 we achieved highest level revenue EBITDA and PAT revenue stood at rupees 46,830 crores growth of 15%, EBITDA rupees 6,871 crores growth of 17% and PAT 5,268 crores growth of 14%. Year on year, the ICE business EBITDA margin in financial year 26 expanded by 90 basis point to 17% driven by pricing, leap savings and operating leverage.
After taking into account the investments behind EV business, the overall EBITDA margin improved by 30bps to 14.7%. Additionally, the average selling price in the quarter increased by 3% quarter on quarter across the product segments. I’m happy to inform that the Board has declared final dividend of rupees 75 per share, taking the total dividend in financial year 26 to rupees 185, our highest ever dividend. With this we maintained our consistent dividend payout of 70% plus our focus on cash management resulted in strong cash flow from operations which stood at rupees 9395 crores for the full year 26 an increase of 80% year on year driven by working capital improvements.
While operating momentum remains strong, the industry is currently facing commodity headwinds that began in March. We expect a transitionary impact on margins in the short term and are mitigating this through calibrated price increases and an accelerated LEAP saving program. We remain committed to our medium term margin guidance of 14 to 16%. Looking ahead, we’ll continue to invest in capacity expansion, brand building and our premium scooters, EV and Global business portfolio. We also remain committed to enhancing customer service through Hero 2.0 and Premia.
We are confident in the growth prospects of the Two Wheeler industry and anticipate high single digit growth during the current fiscal year. With resilient demand and upcoming product launches, we expect to grow ahead of the industry. Thank you. And I will now turn the call over to Sarthak to open the floor for questions.
Umang Khurana — Head Investor Relations and Risk
Thank you. We can start with the Q and A now.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press STAR and then one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press Star and then two participants. You are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all the participants. You may press STAR and then one to ask a question.
We will take the first question from the line of Binay Singh from Morgan Stante. Please go ahead.
Binay Singh
Hi team. Congrats on good set of numbers. My first question is on your volume outlook. Could you share your thoughts on motorcycle industry volume outlook that you expect and for yourself also for FY27 and which will be the key models driving that growth?
Harshavardhan Chitale
Thank you. Vinay, thank you for your question. As Vivek mentioned, industry expects high single digit volume growth in FY27 and it’s a combination of both growth in motorcycles as well as scooters. Having said that, we do expect scooters to grow a couple of point more than motorcycle. So high single digit with little less motorcycle, more in scooters. And looking at our success of some of the new launches and the plans next year, we do plan to outgrow industry both in motorcycles as well as scooters.
Sorry, any
Binay Singh
Key models to watch in that which will drive motorcycle growth for you?
Harshavardhan Chitale
So we do have multiple launches planned. I would not like to give out information ahead of our launches, but you should expect launches across commuter, various high displacement bikes, different ranges of high displacement bikes. And you should also see some great launches coming from us in Veda.
Binay Singh
I would not like to give
Harshavardhan Chitale
Specifics before the launch for competitive reasons.
Binay Singh
Okay. And secondly, in the opening remarks you talked about headwind both on the wage side and the commodity side. And we are seeing almost, I think all time high today. Could you help us think that in the next few quarters? What is the quantum of headwind coming your way? What is the price hike taken? Are you hedged on some of these key commodities? Like how should we think about the margin bridge, you know, in the next few quarters from where we are?
Vivek Anand
So I think it’s difficult to give a number. Vinay, let me start with that because things are evolving as we speak. Things are changing really very, very fast. But at an industry level we are, as you rightly said, we are seeing commodity headwinds which started in March. So we expect that there will be a transitionary impact on our margins in the short term. And as management we are doing whatever it takes to really mitigate the impact of that, which includes taking calibrated price increases and also accelerating our bond saving programs.
But in the medium term we are committed to our margin guidance of maintaining 14 to 16%.
Harshavardhan Chitale
And Dina, I think reason we can’t give any specific number as Vivek said, is it’s literally changing every day, every week. If you see the volatility and hence pegging to any number would be taking shot in the dark.
Binay Singh
But just for FY27, do you think you’ll be able to maintain this range that you’ve given 14 to 16%?
Vivek Anand
See again we are certainly committed to that. But as I said, the way things are evolving, it’s difficult to really commit at this point in time that how the full year is going to be. But what we can certainly talk about is the interventions, what we are really doing. Right. So we are certainly, as I said, we’ve taken a calibrated price increase in April. Right. We are closely monitoring the market conditions and if there is an opportunity, we will try to cover up more during the quarter and in the times to come.
Right. But certainly internally we have accelerated our cost savings program. We are really looking at postponing some of our discretionary spends, cutting down on our discretionary spends to just make sure that to whatever extent we can mitigate in the short term, as a management, we are doing whatever it takes to mitigate.
Binay Singh
Thanks. And just lastly on the EV losses, quite sizable, do you think they have peaked out? How to think about it in terms of at what volume do they start to inch down? Any comments on pli, like how to think about this EV loss number narrowing as the year progresses.
Harshavardhan Chitale
We are still in the phase of building out our EV portfolio and we still have many new launches planned in the year and hence significant R and D investments are happening there. As I mentioned, we are also in process of big capacity expansion on ev. So EV is still for us in a build out phase because if you see just about 7% of two wheelers in the country today are EV and there are many categories where EV penetration is very low. So it’s still a build out phase for us and we are committed to continuing to do that build out.
Coming to the second question on pli, maybe Vivek, you can give the. You are
Vivek Anand
Absolutely right. We are in an investment phase. But when I really look at our performance quarter on quarter, the EBITDA losses per unit is actually coming down. Right. Each quarter. Having said that, Vinay, I just want to briefly talk about the three pillar strategy we have in terms of making this business self sustainable. Right. So you talked about PLI. Let me start with PLI. So I’m happy to share that we now have PLI for three products. Right. Which almost cover 60% of our portfolio. Right.
And we have plans during the year to go to almost 90% of our coverage and almost it translates to 13% of revenue as the benefit. So you can work out that this could certainly help us in terms of achieving self sustainability for our EV business. We talked about, has talked about scaling up the business because that’s something really important for us to really as one of the levers to path to profitability. So we’ll continue to scale up and invest in this business. And the third thing I want to call out is the BOM cost reduction.
So we are working aggressively on driving efficiency, leap savings and better unit economics for our new launches. So with all these three initiatives. Right. We strongly believe that we will continue to improve the profitability of this business quarter on quarter.
Binay Singh
Thanks. Thanks team for the detailed response. If you could just end with EV revenue and losses for the quarter. That’s it. Thanks.
Vivek Anand
Yeah, we’ll possibly take this offline separately with you.
Binay Singh
Okay. Yeah, thank you. Thanks.
Operator
Thank you. We will take the next question from the line of Gunjan Pratyani from Bank of America. Please go ahead.
Gunjan Prithyani
Yeah, hi, thanks for taking my questions. Just continuing on the margin question that Pinay asked, could you talk about the price hikes taken so far since the beginning of this year and also is it fair? Could you also share in the sense that all the price hikes that we have taken, does it largely cover for where the commodities are right now or it covers 50%, whatever. Is there some thoughts that you can share? You know, what is the offset that we’ve already managed through the price hikes taken?
Harshavardhan Chitale
Yeah, thank you for the question, Gunjan. So the price hike that we’ve taken is close to 2%, varies by different model, but approximately say 2% of the same price commodity and the labor cost and the fuel cost increase is far higher than that. It’s in high single digits and it’s changing day by day. So the price hike as of now does not cover fully the bond cost increase. Having said that, the other mitigating factors that as Vivek talked about is a bond cost reduction through our value engineering concept saving kind of programs.
Some of the offsets that we are also getting through, reduction in discretionary spend and volume leverage. So there are offsets through other things, but all of these put together in the short term will still have a margin impact which will be transitory as Vivek mentioned. So it will not fully offset the total commodity impact.
Gunjan Prithyani
And just so maybe I’m clear, what you mentioned is high single digit increase that you mean is high single digit increase as a percentage of ESP or as a percentage of revenue? That’s the way I should look at that number. Right, 2% again, maybe. You know, I
Harshavardhan Chitale
Agree. Great, great point. So 2% was on the revenue on the sale price, but high single digit was on the BOM cost.
Gunjan Prithyani
Okay, okay, got it. That’s clear. And the second question, I’m just going back to the introductory points that you made on capacity ramp up. Could you just refresh us where we are on EV capac E scooter capacity right now? Where do we plan to take it through the course of the year? And also on the I scooters, that is the Zoom and the Destiny portfolio. Because I think that’s something that you all also spoke about in last quarter that we are facing capacity bottlenecks. So some refresh on the numbers will help on both E scooters and Ice scooters.
Harshavardhan Chitale
Sure. So starting with Ice scooters, we increased our destiny capacity by 50% already we are in process of doubling our Zoom capacity. So significant on both of them, as you can see. And on EV we have, we are close to completing expansion which will effectively get us 50% more capacity than the last quarter. So within a month we’ll be at a 50% more capacity than last quarter. And then additional few quarters down the road we are in process of further doubling capacity.
Gunjan Prithyani
So we have a 60,000 odd scooter volume run rate right now. Is it fair to say you’re sort of working through a number which is closer to, you know, if you’re saying doubling this could be closer to 100,000. Is that what we are seeing visibility in the business?
Harshavardhan Chitale
That’s our ambition.
Gunjan Prithyani
Okay, got it. And last question, maybe you know, harsh for you now you’re three months into the firm. Right. I mean, any thoughts that you would, you know, sort of like to talk about how you are looking at recalibrating strategies, areas that you’re prioritizing, doubling down on areas where you think, you know, could be, you know, where we’re doing fine and you know, can be kept aside for a bit. So some, some thoughts three months into the system, any recalibration to the strategy, anything that you’d want to talk?
Harshavardhan Chitale
Sure. So let me start with one part of your question where I, where I’ve seen where we’re already doing very well and it’s a question of continuing and just doing more of the same. First part of it and then I’ll come to the second part of where else are we going to focus more? So we are doing exceedingly well when it comes to entry and commuter motorcycles in some of those ranges, as you know, we have market share in excess of 90% and last year we grew on top of that market share. So we are doing exceptionally well when it comes to our entry and commuter motorcycles.
We have probably best in the industry go to market in terms of points of sale and also points of service wherever you go in the country. We are present in fact in 93% of the talukas in the country. We have our point of sale presence. So you biker today a rider can buy our bike and go anywhere and expect service will be available. So I think these two, I would say are great foundations. Third, we do see brand salience high across various categories and we do see across value chain, whether suppliers or dealers.
I think relationships and trust that I’m sure a lot of the competitors and peers could give an arm and leg for. So those are the things that are actually great and we are going to maintain going forward. Now where are we going to put more emphasis and where there is more opportunity. First, as we talked about in last quarter as well is have a bigger pie of the scooterization trend that we see and hence all that capacity expansion that we spoke about. So we will have even stronger play going forward in scooters.
We will also have much, much stronger play and share going forward in our ev. And hence you’ve seen our continued commitment, whether it was many years back to ather to last financial year to Euler, which also gets into additional categories in EV and continued investment in Veda. So EV is a second area of focus. Third big area of focus for us is other low emission power trains. We believe India is not just a single low emission powertrain story. There will be multiple different powertrains will have their role to play and hence we are also investing and you should see some launches on that from us.
On vehicles that will work on higher blends of ethanol. We are also increasing focus going forward on technology and that’s where I spoke about in my opening remarks on power trains, connected vehicles, use of AI in different functions. So that’s another area where we are increasing emphasis. And lastly, as a relatively late entrant in into exports, we started much later than some of our peers. We have a lot of headroom for growth in our global business. Last year we grew by 41%, year before that we grew by 40%.
But still our exports is much smaller than what it could be and hence that will be a continued focus of expanding right market fit products for different geographies in the world and also opening more and more countries. In terms of our presence right now present in 52 countries but we see opportunities in many more.
Gunjan Prithyani
Super useful. Thank you so much and best wishes.
Harshavardhan Chitale
Thank you.
Operator
Thank you. Before we take the next question, ladies and gentlemen, in order to ensure that the management will be able to address all the questions from the participants in the conference call, we request you to kindly limit your questions to two per participant. If you have a follow up question, please rejoin the queue. Again, we will take the next question from the line of Amin Pirani from JP Morgan. Please go ahead.
Amyn Pirani
Yes, hi. Thanks for the opportunity. Actually my first question is, you know, something that you know. Sir, you mentioned towards the end of your comments on the exports. So last two years we’ve seen a very sharp increase in our exports. So any color or guidance you can provide as to how should we think about maybe the next 12 months or maybe the next 12 to 24 months in terms of the momentum and are there any specific markets where we are seeing any improvements and how should we think about the development in this segment?
And also are there any near term risks that we should think about given, you know, whatever is happening in terms of logistics, global shipping lines, so on and so forth?
Harshavardhan Chitale
Yeah, thank you for your question. So we have good traction on our products in Latin America and there are more and more countries where we plan to open our present and strengthen our present. So Latin America we have good presence and we should see more opportunity there. We are relatively small in Africa, but we are now opening many countries also planning launches next year in Africa. We are actually the largest two wheeler brand in Bangladesh, but we operate only in about 50% of the market there and we don’t operate in 50% and we are planning to have our launches into that balance 50% as well this year.
We have reentered after a bit of a hiatus in Sri Lanka last year and we are rapidly gaining share in Sri Lanka. So to answer your question, nearby SARP Geographies Africa, which is a new entry and expansion for us, and Latin America is further building on what we are already doing and getting into newer territory. We do hope to continue our momentum of last two years in FY27 as well. Having said that, the last part of your question about certain near term challenges out of the West Asian War we do see fuel price hike in Bangladesh in Sri Lanka there we do see some impact on demand in the short term and we do see increase in transportation cost container costs all over the world.
But that’s a matter of then pricing it and passing it on in the end retail price and so far we and our dealers have been able to do so.
Amyn Pirani
Great. Thanks for the color and thanks for the comments here. My second question is more on the domestic demand and market share and while it is well appreciated that in every category or most categories you have managed to gain share last year because of the differences in your salience in scooters and EVs, your market share overall retail market share still has come off a bit even though that trend was also much better than the last few years. So looking forward in FY27 I know it might be a difficult question to answer.
How should we think about your retail overall market share and the salience and how soon do you think that your salience in scooters and EVs can catch up so that your overall market share starts to look stable to improving?
Harshavardhan Chitale
I think it’s a great question in the way you put it that while we gain share across categories because of the business mix of different categories, it appears that arithmetically total retail share has come down. But as we continue to outgrow the market in these high growth areas, whether it’s EVs or scooters or premium or also in our exports in each of them, and as that share continues to grow in our business mix, I think it’s a matter of time where we expect to see overall reversal and also gaining of total retail market share.
I think it’s a question of just doing a math of how many quarters of that continued share gain will flip that. If we were to look at our last two quarters of growth on each of these categories, we have outgrown the market significantly on each of these categories and hence it’s a question of just continuing that momentum. So maybe, for example, two and a half times the industry. Scooters, 48% exports, 41%. Harley Davidson range 26%. So I mean it’s a question of now just continuing that momentum for a few more quarters and then the math flips.
Amyn Pirani
Sure, we’ll look forward to that. Sir, thanks for the opportunity and I’ll come back in the queue.
Operator
Thank you. We will take the next question from the line of Kapil Singh from Nomura. Please go ahead.
Kapil Singh
Good morning sir. Thanks for the opportunity. I just wanted to understand how you think will be the pacing of growth between the two halves of the year. Because last year we had a very strong second half and a flattish first half. So in the second half of the year are you expecting growth on this base? Just some color there will be helpful.
Harshavardhan Chitale
So you’re right. I think we do have a benefit of base effect in the first half and hence we do expect the first half growth to be stronger and I think the second half will be relatively lower than the first half. So I think there is a base effect definitely that will come into play. But overall for the full year as a whole we do continue to see growth momentum that you have seen in our overall revenue growth of FY26.
Kapil Singh
Sir, also add a quick follow up on the commodity cost in Q4. How much commodity cost pressure did we face?
Vivek Anand
Yeah, so Kapil in Q4. Let me just so our commodity cost increase in Q4 was total of 2000 rupees per unit. And in terms of if you really look at our revenue per unit, we also had a corresponding increase of 2,000 rupees in the revenue per unit.
Kapil Singh
Okay. And so how much price hike we have taken in April?
Vivek Anand
About 2% we’ve taken and that ranges by products. So it starts with anything from 700 to 3500 rupees.
Kapil Singh
Okay, just one follow up on the EV demand and the scooter demand you’ve been talking about, you know, much higher growth for scooter portfolio. Just from a consumer trends point of view. If you could share that. Last few years we have been observing that motorcycle growth has been somewhere in mid single digits and scooters and EVs have been much higher. Is there a shift also happening here between these categories or it’s just that more consumers are coming in the scooter category because is this a trend that we should expect for next few years?
Just trying to understand
Harshavardhan Chitale
In the near term? That’s definitely so I think the scooterization has happened to the industry and scooters as a share of two wheeler industry has grown by a couple of points every year for last few years. And we do expect that to continue in the near term. And hence you saw so much of focus from us in new launches in scooters and building up of our capacity in scooters that we spoke about.
Kapil Singh
Just trying to understand if motorcycle consumers are also in some ways straddling towards scooters as more options are coming here. Is that something you’re observing or it is that the scooter consumers are going much faster
Harshavardhan Chitale
So we are not seeing shift away from motorcycles if that was your question. Because these are two different consumer use cases. Wherever you need longer commute or higher load bearing capacity, that’s where motorcycles come into play and hence these are two distinct use cases. But with the urbanization that’s happening in the country, the use case when scooters are good fit is where the growth has been higher. But it’s not that people who have motorcycles are leaving motorcycles and going to scooters.
Jay Kale
Okay, thank you so much.
Operator
Thank you. We will take the next question from the line of Raghunanban from Nuama Wealth Management. Please go ahead.
Raghunandhan
Thank you sir for the opportunity. Congratulations on good set of numbers. Firstly I wanted to request your thoughts on couple of regulations. One is that mandatory ABS regulation and second is this draft EPR notification which came out recently wanted to check what is your thoughts, what is the status currently and what do you think can be the impact in future.
Harshavardhan Chitale
So on ABS there hasn’t been any development over last few months. We continue to work with government on ways and means to keep making two wheelers safer. But on specific ABS related regulation draft that had come there has not been any further development on that as of now. And on the EPR draft, Vivek, do you want to give some more details?
Vivek Anand
So EPR at this point in time, as you rightly said, it’s still, it’s an evolving stage. Right. So the industry is at this point in time working on in terms of how to really operationalize it. Right. So and as you know the pricing is still evolving. So I think it’s it’s early days at this point in time for the industry. Yeah, it’s difficult for us to really quantify any impact.
Raghunandhan
Noted. Just a clarification. Would there be any retrospective impact as well of epr?
Vivek Anand
This is, this is currently under discussion. I’ll say so we are really looking at evaluating all options. Right. So once we have clarity and I think the clarity is at an industry level. Once we have more clarity we’ll be happy to really come back to you.
Raghunandhan
Thank you sir. And second question is a housekeeping one. Can you share the export revenue for FY26 and value terms and also the current dealer inventory within that? Also if you can give some light on scooter and EV because generally that is where dealers say that if EV scooter inventory was much higher they could have sold much more.
Vivek Anand
Yeah. So in terms of the dealer inventory it’s around five weeks. I’ll say. Yeah. And your. And as Harsh said, we have actually brought down our dealer inventory during the year. So it’s currently at five weeks. And in terms of exports revenue it is fully. Just a minute.
Harshavardhan Chitale
In terms of volume it was in excess of 4 lakh units. And value, we can come back to you with value. I think Vivek is looking up the number. Yeah,
Vivek Anand
It’s around 3500 crores. And in terms of volume it is four 2000 units.
Raghunandhan
Thank you sir. And within the dealer inventory which you mentioned, how much would it be for say EV scooters?
Vivek Anand
We can certainly take it offline. I’ll be. But yeah, certainly EV scooters will be on the lower side. As Harsh talked about, we are in the process of building capacity nationally in single digit days.
Raghunandhan
Noted sir. Thank you. Thank you so much for the details. Very helpful.
Operator
Thank you. We will take the next question from the line of Sonal Gupta from HSBC Asset Management India. Please go ahead.
Sonal Gupta
Yeah, hi, good morning and thanks for taking my question. So just most of them have been answered just on the, I mean just a data point on spare part sales. Could you give us what is that for this quarter and the year?
Vivek Anand
Yeah, so for the quarter it’s 1650 crores and for the full year it’s around 6200 crores which is almost a growth of 6% year on year.
Sonal Gupta
Okay. And, and just also in terms of like you’ve talked about a few things but in terms of what is the total R D spend that we had during the year and how do you see that trending going forward?
Vivek Anand
So I think we can certainly share the numbers but in terms of trending clearly we are increasing our spending in this space year on year. Right. So we can certainly offline share the details with you both in absolute and as a percentage of revenue, which I know is more is close to two and a half. But we can certainly share the details.
Sonal Gupta
Right. And just sorry, one last question around. I mean like you mentioned about the expansion on the scooter and the EV capacities. So could you just sort of give us some quantification rate like currently, like where are you and by when do you see to what numbers? Right, like so Ev, I understand we were at about 15,000amonth, which is coming to 30,000. And then on scooters, if you could just quantify by when do you see where are you currently and when do you see the extended capacity coming in?
Harshavardhan Chitale
No, we did answer that question earlier. I think as I said, destiny, we’ve increased capacity by 50%. Zoom. We are in process of doubling the capacity which will also happen this quarter. And on EV, as you mentioned, we’ve gone to from 15,000 to 25,000 to further doubling of that capacity before end of this year.
Sonal Gupta
So the EV will see another doubling by end of this year is what you’re saying.
Harshavardhan Chitale
That’s right.
Sonal Gupta
And sorry, on the scooters also, could you, I mean by when are we expending this additional capacity coming in?
Harshavardhan Chitale
This quarter.
Sonal Gupta
This quarter itself. Okay, sure. Thank you so much.
Operator
Thank you. We will take the next question from the line of Jay Kali from Elara Capital. Please go ahead.
Jay Kale
Yeah, thanks for taking my question. My first question was regarding the demand scenario. I understand you mentioned about high single digit growth for the industry. Just wanted to understand, you know, if you see three months back also probably we would have expected a similar kind of growth. And post that we’ve seen a lot of, you know, macro headwinds in terms of sentiments around expected fuel price increase, prices increasing. So are you not expecting any dampening of that sentiment? What is driving this on ground strength?
If you could help us, some texture around rural versus urban and your expectations going forward? That is my first question.
Harshavardhan Chitale
No, so it’s a good question. It’s a evolving situation. So volume growth of high single digit is what was the expectation pre war? Post war, even if you see April and first week of May, that kind of momentum has continued. We have not seen any softening of demand yet because as an industry the full inflation has not been passed on because of either productivity or volume leverage. Just like what we’ve done, I think as an industry, hence that impact is not passed on to consumers. So there hasn’t been any damping because of that.
Nor has there been any significant move on fuel price as a result, we don’t see in the near term the demand going down. But this is an evolving situation and we need to keep monitoring because of this impact and uncertainty that it creates.
Jay Kale
Your second question
Harshavardhan Chitale
On structural drivers of growth, I Think the urbanization, increasing penetration of E commerce, gig economy and hence two wheelers remaining as a primary source of mobility for bulk of the the country. I think that structural momentum is still there and hence I think the industry’s bullishness towards this volume growth.
Jay Kale
Understood. And second question is on. Historically we’ve spoken about scooters and premium motorcycles being the key focus areas for us. And it’s happening to see a lot of actions being taken and yielding results on the scooter side both on ice and EVs. If you could just talk a little bit about some of your learnings from that category and how one could use it to further enhance your presence in the premium motorcycles. Because that’s clearly one of the last areas where one could expect incremental market share gains.
Harshavardhan Chitale
So I think our learning has been great products and good brand building yield results. And that’s what has happened with our destiny and now with Zoom. You know great products which are differentiated in their category backed up by campaigns that have created brand salience. Same on Veda, a differentiated product. We are the only one in the country that offers a removable battery so that your range anxiety is addressed. So a differentiated product like this and a brand campaign. You’ve also seen our sponsorship of KKR and the activation around that.
And when you combine a product and brand building like that you see a 600 basis point gain and hence you can rapidly gain share. That’s the learning when you get those two. And that’s the formula that now we are repeating. You saw that also with our Harley Davidson. You know we launch X440 and there was a product placement of that also in movie Sayara. So much so that customers would come into our showroom and ask for a Sayara bike. And hence our Harley Davidson range in premium. Although it’s a small part of the entire premium but that grew 26% year on year.
And the new variant of that X440T that we launched last quarter actually gave us 120% growth year on year for the corresponding quarter. So good product backed up by capacity and brand building investment. And I think those three things is what hence we are now repeating as we also expand further into premium.
Jay Kale
Okay, understood. Great. Thanks. And all the best futures.
Operator
Thank you. We will take the next question from the line of Arvind Sharma from City. Please go ahead.
Arvind Sharm
Good morning sir. Thank you for taking my question. It’s a sizable capex that you are planning 1500 crores. Just to understand the entire money would be only for FY27. Is that the correct understanding?
Harshavardhan Chitale
That is right. That is
Arvind Sharm
Okay. And if you could also share the aspiration for PAM revenue. Since we’re targeting a second global parts center, Rafi has got some target in mind that it should be X percentage of vehicle sales. That would be great. Just to understand what the target is. And if EV volumes grew significantly, given the capacity expansion, could it impact margins at least for the near term? Or as you said, PLI would more than offset this. So these 2 questions, PAM renewal target and the impact on.
Harshavardhan Chitale
Yeah, on the PAM. If we look at our total vehicle park and considering that park and the kilometers that they run, how many parts you need to keep them running if you do that calculation, our estimate is that about 50% of that demand is what we are servicing today. And for the balance 50%, either there is gray market or other spurious path that riders, especially those with older bikes are accessing. So that is the kind of headroom available. So first A, the vehicle park itself is growing and B, how do we also get more share of that unaddressed parts market?
And hence the capacity that we are building for our parts business pretty much doubles our path handling capacity. So the new center that we are setting up is to get us at double the capacity. That’s first part of your question. And on the ev, PLI will certainly help in the investment phase as we are expanding capacity and our continued expansion on ICE should hopefully help us mitigate this continued investment as we rapidly grow our ev.
Unidentified Participant
Sure, sir, thank you. That’s all from my side, sir. Thank you so much.
Operator
Thank you. We will take the next question from the line of Pramod Amti from Incred Capital. Please go ahead.
Pramod Amthe
Yeah, hi. Thanks for taking my question. So the first question with regard to Euler now you have been investing consistently almost like 200 crores quarterly. Wanted to get how much stake you hold now end of the year. And what is the expected investment plan in FY27 or next two, three years?
Harshavardhan Chitale
Yeah, maybe just to first clarify, we are investing 200 crore quarterly. We closed a 210 crore investment as a follow on investment to our earlier investment. But it’s not a 200 crore quarterly investment. Could you please repeat the second part of the session?
Vivek Anand
That takes our. So we just invested 200 plus crores and that takes our shareholding to close to 37%.
Pramod Amthe
And what’s the business requirement? If you can disclose for next one.
Vivek Anand
So you write. So promote this should take care of their funding requirement for the current fiscal.
Pramod Amthe
Okay, got it. And Second question is with regard to the scooter portfolio, considering the success which you have achieved on the EVs, does it still make sense to balance both ice and EV portfolio? Or you could have gone overboard on the EV portfolio and keep the legacy out on building capacity on ice. How are you looking at it?
Harshavardhan Chitale
So what we are seeing is both are growing rapidly and hence there is an opportunity of growth for both. And hence our view is I think we do need to continue to invest in both and gain share in both. So it’s a customer choice and different use cases depending on total cost of ownership range and so on and so forth. So it’s not either or, it’s and for us.
Pramod Amthe
But are you creating flexibility in terms of production capacity between both of them or how to.
Harshavardhan Chitale
So these are manufactured in the same factory. For example in our Tirupati factory, both are manufactured there. It’s different lines but in the same factory. So a lot of the infrastructure does get shared.
Pramod Amthe
Okay, sure. And if I can ask Harshvardhan, looking at your three months into the tenure, what has positively surprised you in the firm and what are the challenges you still feel have come through?
Harshavardhan Chitale
I think strength of our value chain, both on the supplier as well as dealerships, I think it’s really unmatched across industries, different industries that I came from extremely strong value chain. And especially when industry is transitioning, you know, going from one category to the other, having that strength is very useful because then you can move with that entire value chain with trust. So I think that’s a very strong. It’s, I would say more than surprise, something that I wasn’t that aware of.
Jay Kale
And
Harshavardhan Chitale
In terms of challenge, I would say more of an opportunity that I see in some of these categories where higher growth is and that we spoke of.
Pramod Amthe
Sure. Thanks a lot.
Operator
Thank you. We will take the next question from the line of Sridhar Kalani from Antique Stock Broking Ltd. Please go ahead.
Sridhar Kalani
Thank you for the opportunity. Sir, I just need a quick clarification. Firstly on the gross margin side, in the last quarter you did mention that 40 to 50 its impact was expected in Q4. However, we see a sequential significant impact of over 100bps in the gross margin. This is in spite of your earlier commentary that the 2004 unit commodity hike was adjusted with a similar price hike. So just wanted to understand if I’m missing something over here because there seems to be a disconnect. And in the near term also you did mention that further commodity impact may be witnessed.
Any clarity could also be given over there. And third, like the 2,000 per unit commodity price hike, if you could directionally help us understand how like what was this aluminum, steel or rubber prices, if anything on direction basis could be shared would be really helpful. Thank you.
Vivek Anand
Thanks Sridhar. So I’ll just repeat. So during quarter four the material cost inflation was 2100 and the corresponding revenue increase during the quarter was 2000. Right. So clearly you see an impact in gross margin when you compare on a percentage basis of 100 basis point because the margin impact could not be recovered in the last quarter and that’s almost contributing to 60% of the drop in gross margin.
Harshavardhan Chitale
If you see the value is covered, the cost increase is covered by price but not by percent margin that you guessed on that cost and that’s what creates that margin percent impact, not the margin value impact, the
Vivek Anand
Percentage impact there. And secondly there is a higher BOM cost from EV business which also partially impacted our gross margin percentage in the previous quarter. So Those are the two reasons why you find a 100bps drop in the gross margin margin in quarter four
Sridhar Kalani
Also from the 2000 if any directional breakup could be shared. Which is the most significant if anything could be shared.
Vivek Anand
Yeah, you’re right. I think so I can say that yes we have seen inflation across the commodity basket led by aluminum, steel, rubber prices and plastics have also got impacted because of high crude prices. So overall there is a, there is a marginal increase we’ve seen previous quarter in the, in the commodity prices and it’s basically across.
Sridhar Kalani
Okay, so one clarification requested on capacity of EV that you mentioned. So 50% will be by next month increase and then TX increase will be of the additional, including the additional capacity that we may have.
Harshavardhan Chitale
So we said the first one will be in a matter of month and the second phase will be before end of this financial year.
Sridhar Kalani
Okay, thank you sir.
Kapil Singh
That was the last question. Thank you.
Harshavardhan Chitale
Yeah,
Kapil Singh
Thank you. Thank you all for joining the call. Thank
Harshavardhan Chitale
You everyone for joining the call. In case you do have any follow up questions, you know how to reach us and we will get back to you responding to our questions. Thank you and wish you all a good day. Thank you. Thank you.
Operator
Thank you members of the management, on behalf of Financial Services Ltd. That concludes this conference. Thank you all for joining with us today and you may now disconnect your lines. Thank you.