Hero MotoCorp (HMCL IN) – Q3SY26 Result Update – Strong Quarter with Focus Cost Savings – ACCUMULATE
Published on 07 Aug 2026
HMCL reported strong Q1FY27 standalone numbers, beating estimates on all fronts. Revenue was driven by better mix (+8%) and pricing, while cost savings and operating leverage helped partially mitigate some of the commodity headwinds. Its near-term focus shifts to volume and absolute EBITDA growth while retaining mid-term margin guidance of 14-16%. It continues to grow market share in scooters (both ICE & EVs), premium range, global markets, and allied business with focus on cost savings. We estimate volume/realization CAGR of 6.6%/5.2% over FY26-28E translating to revenue/EBITDA/APAT CAGR of 12.2%/12.9%/13.5%. Retain ‘Accumulate’ rating with TP of INR6,000 (previous INR5,600). We value the core business at 16x P/E FY28E and its stake in Hero Fincorp at INR55 and Ather Energy at INR429.
