Shares of Hero MotoCorp came under sharp selling pressure on Wednesday after the company’s management highlighted concerns around commodity inflation, new launch costs and margin pressures during its post-results earnings call.
The stock fell 2.64% to ₹4,974 on the NSE as of 11:12 am after slipping sharply from the day’s high of ₹5,281. The decline came despite an initially positive reaction to the company’s quarterly earnings, with investors turning cautious after management commentary on profitability outlook for FY27.
During the earnings call, the management indicated that rising commodity prices are expected to create headwinds in the near term, which could impact operating margins going forward. The company said it may consider calibrated price hikes to partially offset the increase in input costs.
Hero MotoCorp also acknowledged that it would be difficult to firmly commit to its earlier 14–16% EBITDA margin guidance for FY27 amid the evolving cost environment. However, management maintained that the long-term margin guidance range remains intact.
The company further stated that margins in FY27 are likely to be impacted not only by higher commodity costs but also by investments linked to upcoming product launches and strategic growth initiatives.
Another key concern for investors was the outlook on VIDA, Hero MotoCorp’s electric vehicle business. Management said the EV scooter brand is expected to continue reporting negative margins despite improving volumes and narrowing losses, indicating that profitability in the EV segment may still take time.
The commentary triggered concerns around near-term earnings quality and operating leverage, especially as competition intensifies in both internal combustion engine (ICE) motorcycles and electric two-wheelers.
The broader two-wheeler industry has been witnessing fluctuating raw material prices over the past few quarters, while companies are also increasing spending on EV transition, premiumisation and product refresh cycles.
Market participants appeared concerned that margin recovery may be slower than expected despite healthy demand trends and new product launches.
Hero MotoCorp remains India’s largest two-wheeler manufacturer by volume, with a growing focus on premium motorcycles and electric mobility through the VIDA platform.