Hero MotoCorp expects India's two-wheeler industry growth to moderate to mid-to-high single digits during the second half of FY27, following strong double-digit growth in the first six months.
Speaking during the company's Q2 FY27 earnings call on Thursday, Chief Executive Officer Harshavardhan Chitale said the higher base created by strong sales following last year's GST changes would moderate growth, although underlying demand remained healthy.
"As we see today and are planning for H2, we are looking at still mid-to-high single-digit growth. Even ICE will be in growth with low single digits. And EV will then take it to a high single digit for the industry," Chitale said.
The outlook follows a strong first half for India's two-wheeler industry. According to VAHAN registrations, industry retail sales increased by more than 27% year-on-year in Q2 FY27, with internal combustion engine (ICE) two-wheelers growing 23% and electric models registering 82% growth.
For the first half, industry retail sales increased by more than 20%. Chitale said the company had also examined a two-year period to account for the impact of pent-up demand following GST changes, with industry growth averaging approximately 11% annually over that period.
Hero expects electric two-wheelers to remain an important growth driver during H2, while conventional two-wheeler sales are likely to expand at a slower pace.
Peers Also Expect Growth to Moderate
Hero's outlook comes as other major two-wheeler manufacturers have also flagged a moderation in industry growth during the second half, although their expectations differ.
During its Q2 FY27 earnings call on Wednesday, TVS Motor Company said it expected the conventional two-wheeler industry to grow in the single digits during Q3, compared with the stronger growth recorded in H1. The company attributed the expected moderation to the high comparison base created by last year's GST-related sales surge.
TVS Motor management said the industry continued to show healthy demand, but sustaining the growth rates recorded in the first half would be difficult. It expects electric two-wheelers to maintain stronger momentum and TVS to continue outperforming the wider market.
Bajaj Auto, however, offered a relatively more optimistic near-term outlook during its October 27 earnings call. Joint Managing Director Rakesh Sharma said the overall two-wheeler industry, including electric scooters, had grown 18% during April-August 2026 and was expected to maintain double-digit growth during September-December, although at a slower pace because of the high base.
Bajaj also warned that rural demand could face additional pressure during Q4 because of deficient rainfall and drought-like conditions in parts of Maharashtra, southern India and the Northeast. Sharma said weaker agricultural incomes could affect entry-level motorcycle demand, while premium motorcycles and electric scooters continued to outperform.
Hero Targets Export Recovery in Q3 and Q4
While domestic industry growth is expected to moderate, Hero MotoCorp is banking on an improvement in its international business during the remaining two quarters.
The company expects wholesale exports to return to double-digit growth after shipments were affected by disruptions in Colombia and Bangladesh during Q2 FY27.
"Yes, we do expect to get back to growth. In fact, the expectation is double-digit growth back into Q3 and Q4," Chitale said.
According to Hero MotoCorp's Q2 FY27 investor presentation, international dispatches declined to approximately 85,000 units during the September quarter from 112,000 units a year earlier, a fall of around 24%.
However, international retail sales grew 19% during the quarter, according to management, indicating that overseas customer demand remained stronger than wholesale shipments suggested.
Chitale said an earthquake in Colombia had disrupted port operations and customs clearances, affecting the company's ability to dispatch vehicles. In Bangladesh, higher fuel prices linked to the West Asia conflict weakened demand.
Colombia accounts for approximately 25% of Hero's exports, while Bangladesh is another major market. With both countries facing disruptions during the same quarter, the company was unable to offset the impact through other export destinations.
Management said conditions in both markets had begun improving towards the end of Q2. Chitale added that port operations in the earthquake-affected market had returned to normal, supporting expectations of a recovery from Q3.
Despite the September-quarter decline, Hero's international dispatches increased by approximately 8% to 1.91 lakh units during H1 FY27 from 1.76 lakh units a year earlier.
The recovery expectations come as competing two-wheeler manufacturers have reported stronger overseas performance. TVS Motor's international two- and three-wheeler sales increased by 35% year-on-year to approximately 5.39 lakh units in Q2 FY27. Bajaj Auto also reported 41% growth in overall two- and three-wheeler exports to approximately 7.8 lakh units in Q2. During its earnings call, management said it was aiming to sustain quarterly exports at around 7.5 lakh units.
Hero Expands Presence in Brazil, Mexico and Africa
To reduce its dependence on a few overseas markets, Hero MotoCorp is also expanding its geographical presence.
Chitale said the company was establishing a manufacturing facility in Brazil, where it expects its flex-fuel motorcycle portfolio to support market expansion. It is also strengthening its presence in Mexico and preparing additional product launches in African markets.
The company believes a broader international presence will help reduce the impact of disruptions in individual markets over time.
In India, Hero said demand remained healthy across urban and rural markets despite concerns over deficient rainfall in some regions.
The automaker reported retail growth of approximately 24% during its broader festive period, which covers around 100 days and includes regional festivals such as Onam and Ganesh Chaturthi.
Hero's total motorcycle and scooter dispatches increased by 10.5% year-on-year to approximately 18.68 lakh units during Q2 FY27. Standalone revenue rose 21% to Rs 14,687 crore, while net profit increased by 5% to Rs 1,456 crore.