Hero MotoCorp (HMCL IN) – Q2FY27 Result Update – Cost Savings and Premiumization Supports Margins – ACCUMULATE
Published on 29 Oct 2026
HMCL reported decent Q2FY27 numbers as better mix and judicious pricing actions each contributed ~5% to the revenue growth. Operating leverage and the ongoing LEAP savings program, reduced discretionary spending, premiumization, improving EV unit economics and non-vehicle revenue growth are helping drive its bottom-line. The 125cc motorcycle segment saw customers move to more fuel efficient 100cc segment (where HMCL gained market share) or upgrade to higher cc post GST 2.0 rationalization. HMCL continues to be focused on growth and market share expansion without cutting down on investments as was visible in Vahan share gain every month in Q2. We estimate volume/realization CAGR of 4.7%/5.6% over FY26-29E translating to revenue/EBITDA/APAT CAGR of 10.5%/9.3%/9.3%. Retain ‘Accumulate’ rating with TP of INR5,850 (previous INR5,700). We value the core business at P/E of 16x Sep’28E and its stake in Hero Fincorp at INR42 and Ather Energy at INR402.
