Hero Motocorp Limited (HEROMOTOCO) AI Stock Analysis

• Market Cap: ₹1.11T
• Dividend Yield: 2.9%
• Average Volume (3M): 26.71K
• Price to Earnings (P/E): 21.1
• Beta (1Y): 1.12
• Revenue Growth: 5.18%
• EPS Growth: 27.60%
• Country: IN
• Employees: 9,225
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Manufacturers
• EPS (TTM): 69.54
• Shares Outstanding: 200,081,620
• 10 Day Avg. Volume: 20,053
• 30 Day Avg. Volume: 26,714
• PEG Ratio: 1.02
• Price to Book (P/B): 3.90
• Price to Sales (P/S): 1.84
• P/FCF Ratio: 21.86
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ₹6,816.00
• Price Target Upside: 22.22% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: ₹6,144.00 ▲(10.17% Upside)

Hero Motocorp's strong financial performance and bullish technical indicators are the primary drivers of its stock score. Despite high valuation metrics suggesting potential overvaluation, the company's solid financial health and market momentum support a positive outlook. However, overbought technical indicators could lead to short-term volatility.

Positive Factors

Strong Balance Sheet

Very low leverage and a high equity ratio provide durable financial flexibility. With a debt-to-equity of 0.036 and ROE of 22.7%, the firm can fund capex, survive demand shocks, and maintain shareholder returns without stressing liquidity, supporting long-term resilience.

Robust Cash Generation

Operating cash flow nearly matches reported earnings, indicating high quality earnings and cash conversion. Sustainable OCF supports ongoing investment in manufacturing, distribution and aftermarket capabilities, enabling reinvestment and steady funding for strategic initiatives.

Healthy Revenue and Margins

Consistent top-line growth with high gross margins shows efficient manufacturing and pricing power. A mid-teens net margin supports reinvestment in product and distribution strength, underpinning long-term competitiveness in commuter and premium two-wheeler segments.

Negative Factors

Eroding Operating Margins

A material decline in EBIT margin signals rising operating costs or pricing pressure that can persistently compress operating profitability. If structural, margin erosion reduces cash available for expansion and returns, and requires strategic actions to restore cost efficiency.

Slowing Free Cash Flow

Higher capex has trimmed free cash flow growth, limiting excess cash for buybacks or accelerated dividends. If elevated investment levels continue, the company may need to prioritize projects tightly or adjust capital allocation, affecting near-term financial flexibility.

Rising Debt Needs Monitoring

Although current leverage is low, an uptick in total debt could signal shifting funding needs for expansion or working capital. Continued increases would erode the company’s conservative balance sheet cushion and could constrain future investment or raise financing costs.

Hero Motocorp Limited Business Overview & Revenue Model

Company Description

Hero MotoCorp Limited manufactures and sells motorized two wheelers, spare parts, and related services in Asia, Central and Latin America, and Africa and Middle East. It offers motorcycles and scooters. The company also provides engines, as well as related parts and accessories. It has a strategic partnership with Gogoro Inc. to enhance the shift to sustainable electric mobility in India. The company was formerly known as Hero Honda Motors Ltd. and changed its name to Hero MotoCorp Limited in July 2011. Hero MotoCorp Limited was incorporated in 1984 and is based in New Delhi, India.

How the Company Makes Money

Hero Motocorp generates revenue primarily through the sale of two-wheelers, including motorcycles and scooters, which constitute the bulk of its revenue. The company benefits from a large domestic market in India, where it holds a significant market share, as well as exports to various international markets. Additional revenue streams include the sale of spare parts and accessories, as well as servicing and maintenance of vehicles. The company has also explored partnerships with technology firms to enhance its product offerings, particularly in electric mobility, which could contribute to future revenue growth. Moreover, its strong brand reputation and extensive distribution network support consistent sales and customer loyalty, contributing to its overall earnings.

Hero Motocorp Limited Financial Statement Overview

Summary

Hero Motocorp shows robust growth and profitability with a strong balance sheet and healthy cash flow. Revenue and profit margins are positive, though operational margins face pressure. The company maintains low leverage, minimizing financial risk, and demonstrates strong shareholder returns.

Income Statement

Hero Motocorp has demonstrated consistent growth in revenue over the years, with a notable revenue growth rate of approximately 8.8% in the most recent fiscal year. The gross profit margin stands at a healthy 34.2%, indicating efficient production processes. However, the decline in EBIT margin from 20.9% to 12.5% over two years suggests rising operational costs or competitive pressures. Net profit margin remains strong at 10.7%, reflecting good control over costs. Overall, the income statement reflects a stable and growing company with some operational challenges.

Balance Sheet

The company maintains a robust financial position with a strong equity base, evidenced by an equity ratio of 67.9%. The debt-to-equity ratio is low at 0.036, indicating prudent financial management and low leverage risk. Return on equity is impressive at 22.7%, showcasing efficient use of shareholder funds to generate profits. The balance sheet reflects financial stability, although the slight increase in total debt needs monitoring.

Cash Flow

Hero Motocorp's operating cash flow remains strong, with a slight decline in free cash flow over the last year due to increased capital expenditures. The operating cash flow to net income ratio of 0.98 reflects solid cash-generating capabilities. Although free cash flow growth has slowed, the company continues to generate sufficient cash to cover operational and investment needs, which supports its financial health.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	404.40B	409.23B	375.99B	337.38B	289.78B	304.52B
Gross Profit	139.52B	140.13B	119.17B	97.03B	79.74B	85.73B
EBITDA	75.49B	68.29B	60.25B	46.68B	39.93B	46.36B
Net Income	50.38B	43.78B	37.45B	28.10B	23.17B	29.18B
Balance Sheet
Total Assets	0.00	283.90B	261.53B	239.17B	224.78B	230.96B
Cash, Cash Equivalents and Short-Term Investments	71.88B	71.88B	49.74B	40.60B	61.34B	65.72B
Total Debt	0.00	7.00B	6.06B	5.68B	6.05B	5.84B
Total Liabilities	-194.04B	89.86B	83.18B	71.36B	64.84B	75.36B
Stockholders Equity	194.04B	192.72B	176.99B	166.56B	158.47B	154.16B
Cash Flow
Free Cash Flow	0.00	34.41B	41.35B	20.10B	15.34B	35.29B
Operating Cash Flow	0.00	42.97B	49.23B	26.14B	21.04B	41.10B
Investing Cash Flow	0.00	-17.03B	-18.28B	-4.21B	-2.22B	-22.89B
Financing Cash Flow	0.00	-28.15B	-27.17B	-21.47B	-19.75B	-18.52B

Hero Motocorp Limited Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 5576.90
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:HEROMOTOCO, the sentiment is Neutral. The current price of 5576.9 is below the 20-day moving average (MA) of 5659.51, below the 50-day MA of 5841.45, and above the 200-day MA of 5006.64, indicating a neutral trend. The MACD of -93.59 indicates Positive momentum. The RSI at 43.00 is Neutral, neither overbought nor oversold. The STOCH value of 43.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IN:HEROMOTOCO.

Hero Motocorp Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EICHERMOT	76 Outperform	₹1.95T	37.87	―	0.96%	25.37%	19.52%
HEROMOTOCO	72 Outperform	₹1.11T	21.11	―	2.90%	5.18%	27.60%
HYUNDAI	65 Neutral	₹1.79T	30.56	―	0.91%	-0.35%	-4.21%
BAJAJ.AUTO	64 Neutral	₹2.68T	29.89	―	2.31%	11.83%	13.79%
TVSMOTOR	63 Neutral	₹1.75T	59.90	―	0.27%	16.89%	38.92%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
TATAMOTORS	60 Neutral	₹1.29T	1.38	―	1.00%	-6.87%	193.82%

Hero Motocorp Limited Corporate Events

Hero MotoCorp Sets Q3 FY26 Earnings Call with Analysts and Investors

Hero MotoCorp has informed the stock exchanges that, following its Board meeting scheduled for February 5, 2026, it will hold an earnings conference call with analysts and investors on February 6, 2026, to discuss its financial results for the third quarter of fiscal 2026. Senior management, including the Executive Director and Chief Technology Officer, the Chief Financial Officer, key business heads and the Chief Risk Officer and Head of Investor Relations, will participate in the call, underscoring the company’s focus on transparent communication with the market and providing detailed insights into its operational and financial performance to institutional stakeholders.

Hero MotoCorp Receives Independent ESG Rating of 75 from NSE Sustainability

Hero MotoCorp Limited disclosed that NSE Sustainability Ratings & Analytics Limited, a SEBI-registered ESG rating provider, has independently assigned the company an ESG rating of 75 based on publicly available information for the financial year 2024-25. The company clarified that it did not commission or engage the rating agency for this assessment, underscoring that the rating is an external, unsolicited evaluation that may bolster Hero MotoCorp’s standing with investors and other stakeholders who increasingly factor ESG performance into their decision-making.

Hero MotoCorp Ends 2025 With 40% Dispatch Surge, Strong Q3 and EV Momentum

Hero MotoCorp posted a 40% year-on-year rise in December 2025 dispatches to 456,479 units, supported by 291,732 VAHAN registrations, as sustained festive demand, multiple new launches, and strong performance in both ICE and electric scooters underpinned growth. The company delivered a robust third quarter of FY26, with double-digit expansion in motorcycles and a 45% surge in ICE scooter volumes led by new Destini and Xoom models, while its global business recorded 21% dispatch growth in December and 41% export growth for the quarter on the back of new markets and portfolio additions. Hero’s EV arm VIDA also accelerated, achieving 10,701 VAHAN registrations in December and an 11% market share driven by the VX2 EVOOTER and resilient consumer sentiment, signaling strengthening competitive positioning in India’s rapidly evolving two-wheeler and electric mobility landscape.

Hero MotoCorp Opens Special Window for Re-Lodgement of Physical Share Transfers

Hero MotoCorp has announced, via newspaper advertisements, the opening of a special window for shareholders to re-lodge transfer requests of physical share certificates. The move, disclosed under SEBI’s listing regulations and available on the company’s website, aims to facilitate investors still holding physical shares to regularize or complete pending transfer requests within a defined period, potentially improving share transfer compliance and aligning with regulatory efforts to streamline securities in dematerialized form.

Hero MotoCorp’s VIDA Launches DIRT.E K3 for Young Riders

Hero MotoCorp’s emerging brand VIDA has launched the DIRT.E K3, an electric motorcycle designed for young riders aged 4 to 10 years. This new product marks VIDA’s entry into the off-road segment, offering a size-adaptive motorcycle that grows with the rider, providing a safe and sustainable riding experience. The DIRT.E K3 features a three-stage adjustable system that allows the motorcycle to transform across Small, Medium, and Large configurations, addressing the common issue of young riders outgrowing their bikes quickly. This launch underscores Hero MotoCorp’s commitment to shaping the future of mobility by nurturing young riders’ potential and providing them with innovative and responsible mobility solutions.

Hero MotoCorp Challenges Tax Demand Order from Uttar Pradesh Authorities

Hero MotoCorp Limited has received a tax demand order from the Deputy Commissioner of State Tax in Lucknow, Uttar Pradesh, alleging discrepancies in the company’s Input Tax Credit claims for the financial year 2021-22. The order demands a payment of approximately Rs. 1.1 crore in taxes and penalties. Hero MotoCorp believes the tax demand is not legally sustainable and plans to appeal the decision. The company asserts that this issue will not materially impact its financials or operations.

Hero MotoCorp to Issue Duplicate Share Certificates Amid Compliance Measures

Hero MotoCorp Limited has announced the issuance of duplicate share certificates to replace original certificates that have been reported lost or misplaced. The company has published a newspaper advertisement to inform the public and shareholders about this development, indicating that a Letter of Confirmation will be issued if no objections are received. This move is part of the company’s compliance with SEBI regulations and aims to maintain transparency and trust with its stakeholders.

Hero MotoCorp Announces Investor Meeting Schedule

Hero MotoCorp Limited has announced a schedule of upcoming investor meetings, including sessions with Macquarie foreign clients, J.P. Morgan, and Mirae Asset Capital Markets. These meetings, set to take place in Gurugram and virtually, aim to engage with investors and analysts, potentially impacting the company’s market positioning and stakeholder relations.

Hero MotoCorp Achieves 31% Growth in November Dispatches

Hero MotoCorp reported a 31% year-on-year growth in dispatches for November 2025, driven by strong post-festive momentum and successful new model launches. The company recorded 604,490 unit dispatches, supported by positive consumer sentiment, GST benefits, and a favorable macro-economic environment. The growth was also reflected in VAHAN registrations, which saw a 26% increase over October and November 2025. Hero’s VIDA brand also experienced a 66% year-on-year growth in registrations, highlighting robust retail sentiment and consumer confidence.

Hero FinCorp Files Addendum for Upcoming IPO

Hero MotoCorp Limited announced that its associate company, Hero FinCorp Limited, has filed an addendum to the Draft Red Herring Prospectus with the Securities and Exchange Board of India. This move is part of Hero FinCorp’s planned initial public offering, which includes a fresh issue of equity shares and an offer for sale by existing shareholders. The IPO is contingent upon regulatory approvals and market conditions, potentially impacting the company’s financial strategy and market presence.

Hero MotoCorp Achieves Record Sales During Festive Season

Hero MotoCorp Limited reported a strong performance during the festive season in October 2025, with nearly 1 million retail sales and over 0.6 million wholesale dispatches. The company’s growth was supported by favorable market conditions, including GST benefits, and was further bolstered by its entry into the European markets with Euro5+ compliant models. The company’s global business continues to expand, with significant growth in VAHAN registrations, particularly driven by the VIDA brand, which saw a 117% year-on-year increase.