Hero MotoCorp FY25 Annual Earnings Summary
4 quarters covered · ₹40,924 Cr revenue · ₹4,375 Cr PAT · 14.0% average EBITDA margin.
Quarter-by-quarter progression
Management promises made during the year
Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q1 FY25Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q1 FY25Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q1 FY25Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q2 FY25Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q2 FY25Current-quarter results and commentary indicate the prior promise was delivered or materially on track.
Q3 FY25Current-quarter results and commentary indicate the prior promise was delivered or materially on track.
Q3 FY25Current-quarter results and commentary indicate the prior promise was delivered or materially on track.
Q3 FY25Current-quarter commentary contains related evidence, but delivery is not conclusive enough for a clean met verdict.
Q4 FY25Current-quarter commentary contains related evidence, but delivery is not conclusive enough for a clean met verdict.
Q4 FY25Current-quarter commentary contains related evidence, but delivery is not conclusive enough for a clean met verdict.
Q4 FY25Risks flagged during the year
Despite new launches, overall market share is still declining YoY; premium segment competition remains intense.
Q4 FY25 · highEV losses remain significant (EBITDA at -95% in FY25), and breakeven is expected only at 25,000-30,000 monthly volumes, which is a couple of years away.
Q1 FY25 · mediumEV business continues to weigh on margins (198 bps impact), and profitability timeline remains uncertain despite volume growth.
Q1 FY25 · mediumWhile rural demand is improving, any macroeconomic shock or poor monsoon could derail the recovery, impacting entry-level sales.
Q2 FY25 · mediumDelinquencies and collection slowdown in H1 impacted HFCL profitability; management acknowledged industry-wide credit cost increase.
Q2 FY25 · mediumAnalyst flagged that strong festive retail may not sustain post-festival, as seen last year with sharp drop in Vahan registrations.
Q2 FY25 · mediumCountries like Bangladesh, Turkey, and Nigeria face economic challenges that could slow export growth.
Q3 FY25 · mediumVIDA's national EV market share is ~5%, partly due to absence in the sub-₹1 lakh segment (60% of market) and limited geographic presence.
Q3 FY25 · mediumHero FinCorp's credit cost rose ~150 bps to ~6% due to lower collection efficiency, impacting profitability.
Q3 FY25 · mediumScooters and EVs are gaining share, potentially pressuring Hero's core motorcycle business; management downplays this risk.
Q4 FY25 · mediumAn analyst raised concerns about quality degradation post-BS6, which management denied but acknowledged the need for continuous improvement.
Q4 FY25 · mediumThe CEO position is still interim, and management did not provide a timeline for a permanent appointment, which may cause strategic uncertainty.
What changed through the year
Q1 FY25 · Xtreme 125R capacity to reach 40,000 units/month
Management plans to ramp up Xtreme 125R production from 25,000 to 40,000 units per month in the next couple of months.
Q1 FY25 · Premia stores to cross 100 by end of fiscal
The company targets to have over 100 Premia stores by March 2025, up from 40 currently.
Q1 FY25 · New EV products to be PLI compliant from October
The upcoming EV range expansion (mid and affordable segments) will be PLI compliant, launching from October 2024 onwards.
Q1 FY25 · CapEx guidance of INR 1,000-1,200 crore per annum
Annual capital expenditure is expected to be in the range of INR 1,000-1,200 crore.
Q2 FY25 · EBITDA margin guidance of 14%-16% maintained
Management reiterated the overall EBITDA margin range of 14%-16%, despite continued investments in EV and premium segments.
Q2 FY25 · EV portfolio expansion within six months
VIDA will launch new scooter models covering most price and customer segments within six months, including before end of calendar year.
Q2 FY25 · PLI benefits expected from FY2026
EV products will become PLI-compliant in FY2026, with benefits starting to accrue from that period.
Q2 FY25 · Premium store expansion to accelerate
Company plans to open 100 premium stores by end of FY2025, with further acceleration expected.
Q3 FY25 · Double-digit revenue growth in FY26
Management expects double-digit revenue growth for the next fiscal year, driven by new launches, rural recovery, and tax relief.
Q3 FY25 · EV portfolio PLI compliance by next fiscal
The V2 portfolio will become PLI compliant in the coming months, with the entire portfolio compliant by next fiscal.
Q3 FY25 · Premium store count to cross 100 soon
The company plans to expand its premium store network from 60 to over 100 stores in the near term.
Q3 FY25 · Hero 2.0 stores at 700 in less than 700 days
The company has opened 700 Hero 2.0 stores at a pace of more than one store per day, accelerating retail transformation.
Q4 FY25 · Industry growth of 6-7% in FY26
Management expects the two-wheeler industry to grow in the mid to high single digits (6-7%) in FY2026.
Q4 FY25 · EBITDA margin guidance of 14-16%
Management reiterated guidance to maintain EBITDA margins between 14% and 16%.
Q4 FY25 · EV breakeven at 25,000-30,000 monthly volumes
EV business is expected to break even at monthly volumes of 25,000-30,000 units, which is a couple of years away.
Q4 FY25 · Two new affordable EV products in H1 FY26
Two new affordable EV products are planned for launch in the first half of FY26, likely in July.