Share fall

Hero MotoCorp shares fell over 6% on Wednesday, September 2, the biggest single-day drop since March 29, 2022, according to CNBC TV18. The Economic Times reported a decline of more than 4% on the National Stock Exchange (NSE), while Moneycontrol noted an intraday slip of nearly 7% on the BSE, describing it as the biggest fall in a year.

The stock was trading at Rs 5,318 on the NSE at 9:48 am, down Rs 237, or 4.28%, from its previous close of Rs 5,555, as per The Economic Times. At 12:21 hrs on the BSE, Hero MotoCorp was quoting at Rs 5,214, down Rs 331, or 5.97%, according to Moneycontrol. That report also noted the company's market capitalisation at Rs 104,353.63 crore and a share price decline of more than 17% over the last nine months.

The broader auto sector also came under pressure, with the Nifty Auto index slipping more than 3% amid rising crude oil prices after the US and Iran exchanged strikes overnight, Moneycontrol reported. Higher crude prices tend to be a negative for auto companies as they can raise input and transportation costs, fuel inflation, and potentially weigh on vehicle demand.

August dispatches

The share price reaction followed the company's August sales data. Hero MotoCorp's total wholesales increased 3%, while the Street had estimated a 7% rise, according to CNBC TV18. Total sales in August were at 5.68 lakh units, up 2.65% from 5.54 lakh units a year earlier, but below the CNBC-TV18 poll of 5.9 lakh units.

The Economic Times reported that Hero MotoCorp dispatched 5,68,398 motorcycles and scooters in August 2026, up 2.6% from 5,53,727 units in the corresponding month last year. Motorcycle dispatches declined 1.5% year-on-year to 4,93,851 units from 5,01,523 units, while exports fell 24.6% to 26,093 units from 34,588 units a year earlier. Domestic dispatches increased 4.5% to 5,42,305 units from 5,19,139 units.

Scooter volumes surged 42.8% to 74,547 units from 52,204 units, providing the biggest support to overall growth, as per The Economic Times. CNBC TV18 also reported a 42% rise in scooter sales.

For the first five months of FY27, total dispatches rose 17.2% to 27,79,127 units from 23,70,552 units in the year-ago period, The Economic Times reported. Domestic volumes increased to 26,15,815 units from 22,34,193 units, while exports grew to 1,63,312 units from 1,36,359 units.

The company said retail momentum remained strong, with VAHAN registrations growing 19% year-on-year, The Economic Times reported. Its domestic internal-combustion-engine business recorded dispatches of 5,16,747 units and VAHAN retail growth of 18%, supported by demand ahead of the festive season. Hero MotoCorp's electric-mobility business, VIDA, dispatched 25,558 units during August and recorded 38% growth in VAHAN retail registrations. The company also expanded its electric-scooter portfolio with the launch of the VIDA VX2 Go in a 3.1 kWh fixed-battery variant, according to The Economic Times.

EV capacity and Ather stake

Hero MotoCorp CEO Harshvardhan Chitale said monthly EV capacity has risen to nearly 30,000 units, as reported by CNBC TV18. Last month, the company said it was expecting to increase its electric vehicle production capacity to 45,000 units a month by the end of financial year 2027, tripling its output from where it stood at the end of FY26, according to CNBC TV18.

In a separate development, Hero MotoCorp, which is Ather Energy's largest shareholder, was allotted 76.2 lakh convertible warrants at Rs 1,260 each, representing an investment of nearly Rs 1,000 crore if fully converted, CNBC TV18 reported. Post the transaction, Hero MotoCorp's stake in Ather Energy is set to rise to 29.88% from 28.69% on a fully-diluted basis. The warrants do not immediately convert into shares; investors are needed to pay 25% of the warrant price upfront, with the remaining 75% payable when they choose to convert, and conversion can occur in one or more tranches within 18 months of allotment, CNBC TV18 added.

Moneycontrol also reported that the company recently acquired an additional 1.18 crore equity shares, representing 3.01% of paid-up equity, in Ather Energy from the Government of Singapore for Rs 1,758.24 crore.

Financial context

The Economic Times noted that on August 6, Hero MotoCorp reported a 36% year-on-year increase in revenue from operations to Rs 12,999 crore in Q1FY27, compared with Rs 9,579 crore in the corresponding quarter last year. EBITDA stood at Rs 1,727 crore, with margin at 13.3%, slightly above Bloomberg's estimate of 13%, as per The Economic Times. The company sold 16.77 lakh motorcycles and scooters during the quarter, up 23% year-on-year.

Moneycontrol reported a 16.86% year-on-year decline in consolidated profit after tax to Rs 1,417.93 crore for the quarter ended June 30, compared with Rs 1,705.65 crore in the year-ago period. Revenue from operations rose 35% to Rs 13,126.35 crore, according to Moneycontrol.

Chief executive Harshavardhan Chitale said Hero MotoCorp began FY27 with strong momentum, supported by broad-based growth across its commuter, premium, electric-mobility and international businesses, as reported by The Economic Times.