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The market expects much less from Hero MotoCorp than it has delivered before.
At today’s share price, buyers are assuming Hero MotoCorp grows about 1% a year, forever. Over the last ten years it actually grew about 12% a year. That is a big step down from its own record. Either the market can see a problem that the published accounts do not show yet, or it is expecting a slowdown that has not happened.
- How it is valued: Discounted cash flow.
- What the price assumes: 1% growth, against 12% the model takes from its own record.
- Ten-year record: Between FY2018 and FY2026, Hero MotoCorp's revenue went from ₹33,101 crore to ₹47,411 crore — it compounded at about 5% a year over 8 years.
- Biggest swing factor: Rural demand. Main risk: Share loss.
01The world's biggest motorcycle maker
Hero MotoCorp, controlled by the Munjal family, was Hero Honda until the two partners separated in 2011. It is the world's largest two-wheeler maker by volume, dominant in commuter motorcycles such as the Splendor and HF Deluxe, especially in rural India.
It is pushing into premium motorcycles, including the Harley-Davidson X440 built under a partnership, electric scooters under its Vida brand, and holds a stake in Ather Energy.
02What the market is assuming
Work backwards from today's share price and you can see what buyers are quietly taking for granted. Here is the growth that price implies for Hero MotoCorp, next to what the model assumes from the company's own record.
The further apart these two numbers are, the bigger the bet a buyer at today's price is making.
03Hero MotoCorp's record, in plain numbers
Between FY2018 and FY2026, Hero MotoCorp's revenue went from ₹33,101 crore to ₹47,411 crore — it compounded at about 5% a year over 8 years. Net profit grew from ₹3,722 crore to ₹5,776 crore, about 6% a year — roughly in step with revenue. In FY2026 it kept 12.2% of revenue as net profit — against a low of 7.9% in FY2022 and a high of 12.5% in FY2020. The latest year added 15.9% to revenue, well ahead of its own long-run pace.
Revenue and earnings per share in ₹, return on equity and leverage as ratios — all from the filed statements.
Revenue and net profit by year (₹ crore)
| Year | Revenue | Net profit | Margin |
|---|---|---|---|
| FY2018 | 33,101 | 3,722 | 11.2% |
| FY2019 | 33,972 | 3,466 | 10.2% |
| FY2020 | 29,255 | 3,659 | 12.5% |
| FY2021 | 30,959 | 2,936 | 9.5% |
| FY2022 | 29,551 | 2,329 | 7.9% |
| FY2023 | 34,158 | 2,800 | 8.2% |
| FY2024 | 37,789 | 3,742 | 9.9% |
| FY2025 | 40,923 | 4,376 | 10.7% |
| FY2026 | 47,411 | 5,776 | 12.2% |
04How Hero MotoCorp gets valued — and why
Discounted cash flowThis business is valued on the cash it is expected to generate, discounted back at its cost of capital — with growth taken from its own ten-year record rather than from guidance.
05What decides Hero MotoCorp's value
Rural demand
Commuter bike sales follow farm incomes.
Premium push
Higher-priced bikes would lift margins.
EVs
Vida and the Ather stake are its bets on electric.
Cash returns
Hero pays high dividends from a debt-free balance sheet.
06What could go wrong
- Share loss. Rivals have taken share in scooters and premium bikes.
- EV transition. Being late to EVs could cost share.
- Rural slowdown. Weak harvests hit its core buyers.
07What the full Hero MotoCorp valuation shows
Sign in free to see the complete Hero MotoCorp valuation
- ✓Fair value per share — from a ten-year discounted cash flow, every step shown
- ✓The Workbench — change revenue growth, the discount rate or terminal growth and watch Hero's value move
- ✓Bull, base and bear cases — and exactly which assumptions move between them
- ✓Peer comparison — against Bajaj Auto, TVS Motor and Eicher Motors
- ✓Downloadable report — the full write-up, yours to keep
08Compare Hero MotoCorp with peers
The same valuation, run side by side.
Hero MotoCorp vs Bajaj AutoThe largest two-wheeler makers, side by side.→Hero MotoCorp vs TVS MotorHead to head on domestic volumes.→Hero MotoCorp vs Eicher MotorsCommuter scale against premium pricing power.→09Questions people ask about Hero MotoCorp
Is Hero MotoCorp still linked to Honda?
No. Hero and Honda ended their joint venture in 2011.
What is Hero's EV strategy?
Its own Vida electric scooters plus a stake in Ather Energy.
Hero or Bajaj Auto — which is better value?
The two largest two-wheeler makers, compared side by side on their own page.
Is Hero MotoCorp overvalued?
At ₹5,385 the market is pricing in roughly 1% sustained growth, against the ~12% its own record supports. That is less than it has delivered — on these numbers the market is asking the business for less than its own record, which usually means it doubts the record repeats.
What is the intrinsic value of Hero MotoCorp?
It is computed from the filed financial statements using the method that fits this business (discounted cash flow), with every assumption shown alongside the result. The per-share figure and the full working are in the report.
How much debt does Hero MotoCorp carry?
Debt to equity stands at 0.00, against 0.00 at the start of the period — the balance sheet is a core input to the cost of capital used here.