Introduction
Hero MotoCorp, India’s largest two-wheeler manufacturer, has been synonymous with motorcycles for decades. But with the rise of electric vehicles, new-age disruptors, and intensifying competition, many investors are asking: Is Hero MotoCorp still a strong investment in 2025?
This blog evaluates Hero’s market standing, financials, EV strategy, and compares it with its peers to offer a clear investment perspective.
1. Company Overview: From Joint Venture to Global Brand
Founded in 1984 as Hero Honda, the company grew rapidly by offering fuel-efficient, low-maintenance bikes that appealed to the Indian middle class. The split from Honda in 2010 marked the birth of Hero MotoCorp, and since then, it has built its own identity, expanding into global markets and developing in-house R&D capabilities.
Hero continues to lead in terms of unit sales, with over 5.4 million vehicles sold in FY2024-25. However, competition has been eating into its market share.
2. Financial Performance
As per Screener.in, Hero MotoCorp posted revenues of ₹40,570 crore in FY25, growing modestly at 2.15% CAGR over five years. Net profit stood at ₹4,151 crore with a dividend payout of 75.9%, reflecting shareholder-friendly policies. Importantly, Hero remains debt-free, giving it flexibility to invest in R&D and expansion.
3. Strategic Shifts: Electrification and Diversification
Hero has launched the Vida V1 electric scooter and plans to unveil three more EVs by 2025. The company invested ₹525 crore in Euler Motors to diversify into electric 3-wheelers and is targeting the European market with electric scooters by mid-2025.
Spinning off the EV business into a separate entity from February 1, 2025, is seen as a strategic move to bring focused growth in this segment.
Read more: Economic Times
4. Product Innovation and Expansion
In 2025, Hero expanded its product lineup with the Xpulse 210 and Karizma XMR 250, aiming to capture the adventure and premium bike segment. It is also developing an electric version of its iconic Splendor for launch by 2027, targeting value-focused riders switching to electric.
5. Leadership Transitions
CEO Niranjan Gupta has announced his exit, with Vikram Kasbekar taking over as interim CEO from May 2025. This leadership change coincides with the EV spin-off, suggesting a transformative phase for Hero.
6. Peer Comparison: Where Does Hero Stand?
Here’s an updated comparison of Hero MotoCorp with other key two-wheeler and EV players based on the latest data:
| Company | P/E | Dividend Yield (%) | Quarterly Profit (Cr) | Qtr Profit Var (%) | Qtr Sales (Cr) | Qtr Sales Var (%) | ROCE (%) |
|---|---|---|---|---|---|---|---|
| Hero MotoCorp | 19.05 | 2.90 | 1108.38 | 1.51 | 10259.89 | 4.82 | 29.09 |
| TVS Motor Co. | 66.89 | 0.36 | 609.35 | 18.23 | 11134.63 | 10.09 | 14.68 |
| Eicher Motors | 35.23 | 0.89 | 1170.50 | 17.52 | 4973.12 | 19.01 | 31.14 |
| Ola Electric | 53.49 | 0.00 | -564.00 | -51.61 | 1045.00 | -19.37 | -32.13 |
| Urja Global | 486.70 | 0.00 | 0.53 | -45.56 | 20.20 | 84.31 | 1.87 |
| Wardwizard Inno. | 118.20 | 0.72 | 3.84 | -32.63 | 86.27 | -18.84 | 17.84 |
| Tunwal E-Motors | 15.27 | 0.00 | 5.38 | 6.96 | 74.43 | 65.47 | 52.37 |
Insights:
- Hero offers the highest dividend yield (2.90%) and remains among the most profitable.
- Despite its conservative valuation (P/E 19.05), it has strong fundamentals with a ROCE of 29.09%.
- New players like Ola and Wardwizard face high volatility and weaker financials.
7. Risks and Concerns
- Gradual market share erosion due to competition from Honda, TVS, and newcomers like Ola.
- EV execution risk, especially in export markets.
- Leadership transition during a strategic pivot.
8. Future Outlook
Hero MotoCorp is focusing on innovation, EV transition, and global expansion while keeping its financials solid. The next two years will be pivotal as it balances traditional segments with new mobility ambitions.
Conclusion
Hero MotoCorp is not just surviving the EV wave—it’s steering into it with a calculated, well-funded plan. For investors seeking a mix of stability, dividends, and long-term innovation potential, Hero remains a strong contender.
Disclaimer: This article is for informational purposes only. Investors should conduct their own research or consult a financial advisor before making any investment decisions.
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