Hero MotoCorp (HMCL IN) – Q4FY26 Result Update – Decent Quarter but Margins Under Pressure – ACCUMULATE
Published on 08 May 2026
HMCL’s Q4FY26 standalone op revenue and EBITDA margin modestly beat street estimates (fairly in line with PLe). Gross margin is expected to further contract in the short term, but the medium-term EBITDA margin guidance of 14-16% was reiterated. HMCL continues to aim for higher share in scooters (expanding capacity), EVs, premium range, global markets (new geographies), and PAM business with focus on cost optimization. We estimate volume/realization CAGR of 5.5%/5.1% over FY26-28E translating to revenue/EBITDA/APAT CAGR of 10.9%/9.1%/8.4%. Retain ‘Accumulate’ rating with TP of INR6,066 (previous INR6,000). We value the core business at 18x P/E FY28E and its stake in Hero Fincorp at INR40 and Ather Energy at INR360.
