Markets
Hero MotoCorp has hit a speed bump—can it rebound?
Summary
- India’s two-wheeler giant is losing ground as rivals surge ahead in EVs and premium bikes. With market share slipping and management turmoil brewing, can Hero MotoCorp turn the tide?
Hero MotoCorp Ltd, the world’s largest two-wheeler manufacturer, is navigating rough terrain. A shrinking market share, a string of high-profile management exits, and struggles in the premium and electric vehicle (EV) segments have put India’s motorcycle giant on the defensive.
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These challenges have weighed heavily on its stock, which has tumbled nearly 30% in the past six months and more than 20% over the past year. With competition intensifying and consumer preferences shifting, Hero faces a critical question: Can it reinvent itself to reclaim its dominance?
Hero's market share woes
Once the undisputed leader, Hero’s dominance in the two-wheeler market is slipping. Its market share fell from 31.3% in 2023 to 29.0% in 2024, dropping further to a decade-low of 26.9% in January 2025—a sign of mounting challenges.
The decline stems from Hero’s heavy reliance on its legacy commuter motorcycles, while rivals have capitalized on shifting consumer preferences. As demand surged for gearless scooters and entry-level EVs, Hero struggled to keep pace, losing ground to competitors such as Ola Electric, Bajaj Auto, and TVS Motor.
The company has attempted to establish itself in both the electric and premium motorcycle segments but has yet to gain meaningful traction.
Hero entered the EV race with its VIDA electric scooter range in FY23, but the launch failed to gain momentum. High pricing, build quality concerns, and a lack of competitive features kept consumers away. The numbers tell the story: in January 2025, Hero sold just 1,615 electric scooters—well behind Ola Electric’s 24,336 units. Notably, even Ola’s sales were lower than usual.
The company also holds a 40% stake in Ather Energy, a rising EV player. While Ather has a respectable 12% market share, it remains loss-making and lags behind segment leaders Ola, TVS, and Bajaj.
Hero’s indirect EV exposure hasn’t translated into meaningful gains, leaving it struggling to establish a foothold in the segment.
Hero also faces a glaring gap in the premium motorcycle market. While it secured a partnership with Harley-Davidson in 2020 to manufacture the X440 model in India, the company took nearly three years to bring it to market. By the time it launched in July 2023, competitors had already captured a significant share of the high-margin segment.
Delays in EVs and premium models have left Hero trailing more agile rivals, raising doubts about its adaptability.
Leadership shake-up deepens challenges
Hero MotoCorp’s struggles extend beyond market share losses.
A wave of high-profile management exits in recent months has added to the company’s uncertainty.
Earlier this year, executive chairman Pawan Munjal addressed more than 5,000 employees, acknowledging the company’s underperformance. Soon after, CEO Niranjan Gupta and chief business officer Ranjivijit Singh resigned. Gupta, who took the helm in May 2023, had been leading Hero’s push into the premium and EV segments—both of which have delivered lackluster results.
Their departures were followed by the exits of Reema Jain, chief information and digital officer, and Sameer Pande, head of talent management.
Frequent leadership churn can signal deeper organizational challenges, though Hero MotoCorp has dismissed concerns. In a statement, the company said, “Individual people movements or exits are a part of operations in a large, dynamic organization like ours."
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How Hero reshapes its leadership team remains to be seen. For now, Vikram Kasbekar has stepped in as interim CEO while continuing in his role as chief technology officer.
A comeback in the making?
Despite its challenges, Hero is laying the groundwork for a turnaround with its Vision 2030 strategy, which focuses on strengthening its core business and expanding in the premium and EV segments.
To gain traction in the premium market, Hero is ramping up brand-building efforts and launching high-end models, including those from its Harley-Davidson partnership.
At the Bharat Mobility Expo 2025, the company unveiled four new models—the Xtreme 250R, Xpulse 210 motorcycles, and Xoom 125 and Xoom 160 scooters—marking a push into premium two-wheelers.
On the EV front, Hero is expanding its mass-market lineup with the Vida V2 platform and venturing into the three-wheeler EV segment through an investment in Euler Motors, signaling an intent to grow both organically and inorganically. It also plans to extend its EV reach to 200+ cities by FY26, with Production-Linked Incentive (PLI) compliance in the pipeline to improve cost efficiency.
Macro tailwinds could further aid its recovery. The tax relief in Union Budget 2025 is expected to lift consumer sentiment, while government efforts to boost rural incomes and higher disposable incomes—especially during the wedding season—could drive demand, particularly for Hero’s entry-level and 125cc motorcycle segments, according to Axis Securities.
Financials hold firm despite headwinds
Even as Hero MotoCorp grapples with market share losses, its financial performance remains resilient. The company has posted consistent revenue and profit growth over the past three quarters, driven by strong sales.
For FY24, revenue grew 10.6% year-on-year (YoY) driven by higher exports and strategic global expansions. In the most recent quarter, sales rose 5% YoY to ₹10,211 crore, supported by improved realizations. Operating profit climbed 8.4% YoY to ₹1,476.5 crore, with margins expanding to 14.5%.
Hero’s Ebitda per vehicle crossed ₹10,000, reflecting a richer product mix and strategic pricing. Net profit jumped 12% YoY to ₹1,203 crore.
Return ratios remain strong, with RoE at 21.8x and RoCE at 29.5x, outperforming many peers. The company also maintains a robust balance sheet, with a near-zero debt-to-equity ratio of 0.02x, ensuring financial stability even as it navigates an evolving market.
Outlook: A long road to recovery
Hero MotoCorp is making moves to reclaim lost ground, but the turnaround won’t happen overnight. The recent wave of management exits hints at deeper internal shifts that could shape the company’s future trajectory.
That said, Hero’s solid financial footing and strategic recalibration provide reasons for optimism. Its push into premium motorcycles and EVs, coupled with a strong balance sheet, suggests it is laying the groundwork for a comeback.
For more such analyses, read Profit Pulse.
If the company successfully manages its challenges, it could reaffirm its leadership in the two-wheeler market in the years ahead.
About the author: Ayesha Shetty is a research analyst registered with the Securities and Exchange Board of India. She is a certified Financial Risk Manager (FRM) and is working towards a Chartered Financial Analyst (CFA) designation.
Disclosure: The author does not hold shares in any of the companies discussed. The views expressed are for informational purposes only and should not be considered investment advice. Readers should conduct their own research and consult a financial professional before making investment decisions.
