The world’s largest two-wheeler manufacturer achieved a 21% revenue increase driven by record festive sales and premium segment expansion. The Board approved a substantial interim dividend and furthered its electric vehicle transition with additional investment in Euler Motors.
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Hero MotoCorp Ltd (HEROMOTOCO) reported its highest-ever quarterly revenue of Rs 12,328 crore for the third quarter ended December 31, 2025. This represents a 21% year-on-year increase, underpinned by sales volumes of 16.97 lakh units, a 16% rise over the same period last year. Normalized profit after tax (PAT) reached Rs 1,439 crore, reflecting a 20% growth compared to the previous fiscal.
Key Development
The Board of Directors approved an interim dividend of Rs 110 per equity share (5,500%) for the 2025-26 financial year, with a record date of February 11, 2026. Strategically, the company authorized an additional investment of Rs 275 crore in Euler Motors Private Limited, an associate company specializing in electric three and four-wheelers. This infusion, comprising primary and secondary purchases, is expected to increase Hero MotoCorp’s stake in Euler to approximately 36% on a fully diluted basis.
Financial Performance
Standalone EBITDA for the quarter stood at Rs 1,810 crore, marking a 23% increase year-on-year. EBITDA margins expanded by 22 basis points to 14.7%, aided by a favorable product mix and operational efficiencies. Reported PAT for the quarter was Rs 1,348.55 crore, which includes a one-time exceptional charge of Rs 119 crore. This provision follows the government’s notification of four new Labour Codes on November 21, 2025. For the nine-month period ending December 31, 2025, total revenue rose 10% to Rs 34,034 crore.
Business Outlook & Strategy
Management’s strategy focuses on product mix optimization and innovation to sustain financial performance. A key priority is the expansion of the emerging mobility portfolio via the VIDA brand and the Harley-Davidson 2025 lineup, which recently added the H-D X440T and new Road Glide models. Capital allocation also prioritizes sustainability, with investments totaling approximately Rs 7.92 crore in solar power wheeling projects for manufacturing plants in Haridwar, Neemrana, and Jaipur.
Sector and Macro Context
The third quarter saw the company’s highest-ever festive season sales, which were instrumental in driving volume growth. Positive macroeconomic conditions and a revival in rural demand have served as significant tailwinds for the motorcycle industry. In its global business, Hero MotoCorp expanded to 52 countries, successfully entering European markets in Italy, Spain, and France.
Analyst Commentary and Investment Rationale
Internal commentary from the Chief Financial Officer notes that the quarter was characterized by healthy double-digit growth in volumes and strong retail momentum. The company’s ability to maintain margin expansion while investing in electric mobility and premium retail—exemplified by the growth of Hero Premia stores to over 100 cities-provides a rationale for investor interest. The substantial 5,500% interim dividend further reinforces shareholder returns.
Guidance and Future Outlook
The company maintains a positive outlook for its VIDA EV brand, which attained an 11% market share during the quarter. Future growth is expected from the introduction of Euro5+ compliant models in international markets and the expansion of the VIDA VX2 lineup. Regarding regulatory costs, the company is evaluating the financial impact of the End-of-Life Vehicles (ELV) Rules 2025, although precise estimates remain pending a finalized pricing mechanism for scrapping certificates.
Regulatory Milestones and Segment Updates
• Segment Reporting: Hero MotoCorp continues to operate within a single automotive segment.
• Parts and Accessories: The Parts, Accessories, and Merchandising (PAM) business reached record quarterly revenue of Rs 1,673 crore.
• Management: Mr. Prabhat Singh was appointed Company Secretary and Compliance Officer, effective February 5, 2026.
• EV Portfolio: The company launched the DIRT.E K3 size-adaptive electric motorcycle, which received a CES 2026 Innovation Award.
Business Model and Market Situation
Hero MotoCorp has held the position of world’s largest manufacturer of motorcycles and scooters for 25 consecutive years. The business model balances leadership in the 100cc–125cc segment with a push into electric mobility and premium segments. Exports grew 41% during the quarter, highlighting a successful diversification into global markets.
Where Does Hero MotoCorp Ltd Stand Today?
The company remains the dominant player in the Indian mass-market motorcycle segment while aggressively scaling its electric vehicle footprint through VIDA and its investment in Euler Motors. With record revenue, strong margin expansion, and a clear pivot toward premiumization and global expansion, Hero MotoCorp is positioned to navigate the transition to sustainable mobility while maintaining its core market leadership.