Hero MotoCorp: How Did This Auto Stock Perform in Q3?

Synopsis: Hero MotoCorp is in focus after posting YoY growth in Q3 with 22% revenue rise to Rs. 12,487 crore, 16% volume growth to 16.97 lakh units, declared Rs. 110 interim dividend, and expanded EV and global operations.

The shares of this company are one of the world’s largest manufacturers of two-wheelers, in terms of unit volumes sold by a single company in a calendar year, in focus after posting its Q3 results with revenue growth of 22% and declaring a dividend. 

With a market capitalisation of Rs. 1,16,127 cr, the shares of Hero MotoCorp Ltd were currently trading at Rs. 5,804 per share, increasing 1% in today’s market session, making a high of Rs. 5,842.25, up from its previous close of Rs. 5,768.80 per share. 

QoQ performance

Hero MotoCorp reported sequential growth in revenue, with sales rising 2% QoQ to Rs. 12,487 crore from Rs. 12,218 crore. However, profitability showed mild pressure. EBITDA declined marginally by 1% QoQ to Rs. 1,752 crore from Rs. 1,766 crore, while net profit fell 3.5% to Rs. 1,275 crore from Rs. 1,321 crore. EPS decreased by 3% to Rs. 63.35 from Rs. 65.42.

YoY performance

On a year-on-year basis, the company delivered a strong operational performance. Sales grew 22% YoY from Rs. 10,260 crore to Rs. 12,487 crore. EBITDA increased by 24% YoY to Rs. 1,752 crore from Rs. 1,416 crore, indicating operating leverage. Net profit rose 15% YoY to Rs. 1,275 crore from Rs. 1,108 crore, while EPS improved by 14% YoY to Rs. 63.35 from Rs. 55.38, reflecting healthy earnings growth despite cost pressures.

Dividend 

The Board has declared an interim dividend of 5,500%, amounting to Rs. 110 per equity share of nominal value Rs. 2 each for the financial year 2025–26. February 11, 2026 has been fixed as the record date for determining the entitlement of members, and the payment of the interim dividend will be completed on or before March 7, 2026.

Business Highlights 

The Board has approved an additional investment of Rs. 275 crore in Euler Motors Private Limited, to be made in one or more tranches through a combination of primary infusion and/or secondary purchase. Euler is engaged in the business of designing, manufacturing, selling and servicing of electric three and four-wheeler vehicles

Further, the Board has approved investments of up to Rs. 3.25 crore in a solar power wheeling project for the Company’s Haridwar plant, and up to Rs. 4.67 crore in a solar power wheeling project for the Neemrana plant, Global Parts Centre, and Centre for Innovation & Technology, Jaipur, both under the Group Captive Mechanism.

The company recorded sales of 16.97 lakh units of motorcycles and scooters in Q3FY26, compared to 14.64 lakh units in Q3FY25, registering a strong 16% year-on-year growth.

In the Electric Mobility segment, the company expanded the VIDA VX2 range with a new 3.4 kWh variant, further strengthening its EV portfolio, and launched the DIRT.E K3, a size-adaptive electric motorcycle for young riders in India, which also received recognition as a CES 2026 Innovation Award Honoree for its innovative design. 

In Global Business, the company successfully entered the European markets of Italy, Spain, and France, in addition to the UK, expanding its presence to 52 countries across five continents, and introduced Euro 5+ compliant models, led by Hunk 440 SX and Xpulse 200, for European markets.

Morgan Stanley and Jefferies Target 

Morgan Stanley maintained its Overweight rating on Hero MotoCorp with a target price of Rs. 6,471, which is 11.5% upside from current levels. The brokerage said Q3 results were in line with estimates, citing attractive valuations, healthy dividend yield, and sustained double-digit volume growth as key factors supporting its positive outlook.

Jefferies reiterated its Underperform rating with a target price of Rs. 5,000, which is 14% downside from current levels. While it acknowledged good growth in the December quarter, it noted that ASP increased 1% QoQ driven by a higher share of spare parts revenue, with recurring PAT up 20% YoY aided by higher financial income and a lower tax rate.

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