Hero Expects Two-Wheeler Industry to Grow 6–7% in FY26; Aims to Outpace Sector

Hero MotoCorp Ltd expects the Indian two-wheeler industry’s sales to grow by 6–7% in the financial year 2025–26, on the back of favourable macroeconomic factors, expectations of a better monsoon, and strong wedding season demand. The company, however, is confident of outpacing the industry, backed by new product launches and improvements in entry-level and 125cc two-wheeler sales.

“While there is ongoing global turmoil due to the border situation and trade tensions, on the domestic front, the economy has started on a positive note, driven by tapering inflation, lower interest rates, income tax cuts, and expectations of a better monsoon,” said Vikram Kasbekar, Acting Chief Executive Officer, during an analyst call following the company’s FY25 earnings announcement.

“With regard to the two-wheeler industry riding on the wave of positive economic momentum, demand is shaping up nicely, boosted particularly by a strong marriage season in May and June,” he added.

Ashutosh Varma, Chief Business Officer of Hero MotoCorp’s India Business Unit, echoed the optimism and pegged industry growth in the 6–7% range for the current fiscal. He expressed confidence that Hero would outperform this benchmark.

“We have some launches that happened in Q4 which are yet to fully manifest in terms of volumes,” said Varma. “The confidence comes from the delivery we had in Q4. In the entry category, we gained 600 basis points in market share. Over the year, we recovered strongly in the 125cc category, gaining 250 basis points. The new scooters we've launched have met with an amazing response, leading to increased market share and retail growth late in Q4.”

“We are also working, as industry leaders, on the core category. Our work is to expand the category. The fact that we have 1 lakh customers reporting into our workshops every day gives us an excellent opportunity to work on upgrades and owned-based marketing. These are fundamental strengths that we will increasingly leverage this year, and we are very confident this will help us gain market share and outpace industry growth,” the chief business officer said.

On rural demand, company executives noted that recovery was already underway and would likely strengthen with the expected monsoon, a strong marriage season, government spending in rural areas, and lower inflation.

Hero’s global business is also expected to see a boost. “Our strategy of developing country-specific products for markets like LATAM, Bangladesh, and Nigeria is paying off,” said Kasbekar. “We’ve re-entered Nepal and expanded into Sri Lanka and the Philippines, which will meaningfully contribute to growth in FY26. We are confident of gaining global market share this year.”

In FY25, Hero MotoCorp reported total sales of 5.9 million units, including 5.61 million units in domestic sales and 287,429 units in exports. While domestic sales grew 4%, exports surged by 43% year-on-year. According to data from SIAM, total industry two-wheeler dispatches rose 9.1% to 19.61 million units in FY25. Retail sales, as per FADA, grew 7.1% to 18.88 million units, driven by rural recovery and rising consumer confidence.

Recently, another two-wheeler maker, TVS Motor Co Ltd, also said it expects the sales momentum seen in FY25 to continue in both domestic and international markets in the ongoing financial year, with the company aiming to outperform overall industry growth in both markets.

Growth Strategy

Looking ahead, Hero plans to continue investing aggressively in premium motorcycles, scooters, and its EV portfolio.

“We remain consistent in our commitment to growth. We are investing in premium, scooters, and EVs, and also improving customer experience in stores through Hero 2.0 and our Premia offerings,” said Vivek Anand, Chief Financial Officer.

Anand also emphasized Hero's strategy of expanding into adjacent mobility categories. “This quarter, we acquired a 34.1% stake in Euler Motors for ₹510 crore, marking our entry into the fast-growing electric three-wheeler segment,” he said.

“We are positive about the growth prospects of the two-wheeler industry. With steady demand, recovery in both rural and urban markets, ramp-up of the 125cc portfolio, new launches, and continued brand investments, we expect to grow ahead of the industry,” he added.