India’s largest two-wheeler maker expects metal and forex headwinds to persist, but says strong market conditions will allow gradual price increases without hurting volumes.
06 Feb 2026 | 176 Views | By Darshan Nakhwa and Anurag Chaturvedi
Hero MotoCorp Ltd expects commodity price volatility to continue through the March quarter and plans to take calibrated price increases to protect margins, as demand remains strong following GST-led price cuts.
India’s largest two-wheeler maker said rising metal costs and currency movements have begun to weigh on margins, but ...
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Hero MotoCorp Ltd expects commodity price volatility to continue through the March quarter and plans to take calibrated price increases to protect margins, as demand remains strong following GST-led price cuts.
India’s largest two-wheeler maker said rising metal costs and currency movements have begun to weigh on margins, but the overall impact remains manageable given strong demand and pricing flexibility.
“We are seeing inflationary trends. Prices of aluminium and precious metals have gone up starting last quarter,” Chief Financial Officer Vivek Anand said during an analyst call held to discuss the company’s Q3 FY26 performance.
The impact of commodity price volatility in the December quarter was about 40-50 basis points, he said, adding that similar cost pressures are visible in the ongoing quarter.
Price Hikes To Offset Higher Costs
Hero MotoCorp has already taken an initial round of price increases to offset higher input costs and may implement further hikes if needed.
“At the start of the year, we took one round of price increases to mitigate the impact,” Anand said. The company raised prices by about ₹300 per vehicle in January, he added, noting that it will “take adequate price increases as required during the quarter” depending on commodity trends and demand conditions.
The management said the net impact of commodity and forex inflation remains smaller than the demand tailwind created by GST rationalisation in the two-wheeler market.
“The net impact is actually a fraction of the benefit that the market saw from GST,” Chief Executive Officer Harshavardhan Chitale said. “We don’t see price increases to mitigate cost pressures materially impacting demand. We will maintain margins.”
In the December quarter, Hero MotoCorp’s EBITDA margin expanded by 22 basis points to 14.7%, supported by a favourable product mix, pricing actions and operational efficiencies.
Demand Momentum Supports Pricing
Hero MotoCorp said the current demand environment remains supportive, allowing the company to pass on part of the cost inflation through pricing.
Lower effective prices after GST changes have supported demand across entry, executive and premium segments, giving manufacturers room to pass on part of the cost increases without hurting volumes.
“With the growth, we will get overhead dilution and see expansion,” Chitale said, adding that the company continues to balance commodity costs, forex impact and pricing actions.
In Q3 FY26, Hero MotoCorp’s performance was supported by festive demand, improved product mix and growth across scooters, exports and electric vehicles. Revenue and profit rose in the quarter, reflecting strong retail momentum and pricing discipline. Industry demand has also been buoyed by tax cuts and improving rural sentiment, with the two-wheeler market seeing broad-based growth across segments in recent months.