Hero MotoCorp expects its operating margins to stay within the 14–16 percent range, but will likely operate at the lower end of that band in the near term, Chief Financial Officer Vivek Anand said during the company’s Q1FY26 earnings call.
Anand pointed out that while margins held steady at 14.4 percent in the June quarter despite softer volumes, some cost pressures may re-emerge as volumes pick up in the coming quarters. Still, he reaffirmed the company’s margin guidance and said Hero would manage costs prudently to stay within the stated range.
The company saw gross margin improve by 100 basis points year-on-year, aided by price hikes and a richer product mix. However, the gains were offset by adverse operating leverage due to lower revenues following a planned production cut in April. Operating expenses were slightly lower in absolute terms compared to the year-ago period, thanks to continued cost control measures.
The company reported a mixed June quarter. The two-wheeler major posted a flat net profit of Rs 1,126 crore for Q1FY26, marginally higher than Rs 1,123 crore in the same quarter last year, and ahead of estimates. A Moneycontrol poll of eight brokerages had pegged the net profit at Rs 1,054 crore.
Chief Financial Officer Vivek Anand said profitability remained resilient, supported by healthy demand for entry-level and deluxe motorcycles and the 125cc scooter segment. He added that the company’s electric mobility business under the VIDA brand continued to gain momentum, while international operations outperformed the broader market.
The company said it expects retail demand to remain strong in the coming quarters, aided by festive tailwinds and a robust pipeline of new product launches.
At about 12:50 pm, shares of the company were trading at Rs 4,570, higher by 2.13 percent from the last close on the NSE. Hero MotoCorp shares have risen 18 percent in the last three months.
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