Hero Moto shares surge 20% in August. What's driving the two-wheeler stock?

Hero MotoCorp share price touched a nine-month high today, trading at its highest level since November 2024. The rally in the stock price of Hero Moto has helped the company regain ₹1-trillion m-cap

Hero MotoCorp share price today

 

Hero MotoCorp shares continued their upward movement on Tuesday, hitting a nine-month high of ₹5,096.55 on the BSE in the intraday trade. The stock of the two-wheeler company rose 2 per cent on the stock exchange today and has has rallied 8 per cent in the past two days on hopes of demand pick-up due to the likely rationalisation of the goods and service tax (GST).

 

The stock price of the world's largest manufacturer of motorcycles and scooters company was trading at its highest level since November 2024. Thus far in the month of August 2025, Hero MotoCorp share price has outperformed the market by surging 20 per cent. In comparison, the BSE Auto index is up 7 per cent, while the BSE Sensex is up marginally by 0.26 per cent during the period.

 

A sharp rally in the stock price of Hero MotoCorp has helped the company regain ₹1-trillion market capitalisation. At 10:07 AM, Hero MotoCorp stood with a market cap of ₹1.01 trillion, with the stock trading 1.6 per cent higher at ₹5,061 on the BSE. In comparison, the BSE Sensex was up 0.22 per cent at 81,453.  CATCH STOCK MARKET UPDATES TODAY LIVE

What's driving Hero MotoCorp stock price?

 

The government has proposed GST 2.0 reform with an aim to rationalise the current multi-slab structure into a simpler framework, with two main rates of 5 per cent and 18 per cent, and a higher 40 per cent slab for luxury and sin goods.

 

For the auto sector, this overhaul seeks to address long-standing classification disputes—such as those between small cars and SUVs—by moving to clearer, unified tax categories. Internal combustion engine (ICE)-powered vehicles could see a reduced tax burden, while electric vehicles (EVs) will retain their favourable 5 per cent GST rate, with discussions ongoing to cut component-level GST as well.

 

"If the base GST rate of 28 per cent gets revised to 18 per cent, this is positive for the entire sector (including the auto component supply chain) and is expected to drive demand across all segments (PV, 2-W, 3-W & CV). This shall lower the initial purchase price of vehicles for consumers in the range of ~5-10 per cent," according to analysts at ICICI Securities.

 

This is in addition to several tailwinds for the sector such as positive progress of monsoon driving up rural sentiment, income tax benefits, and interest rate cuts.  ALSO READ | Reliance Infrastructure up 4% on bagging 390 MW solar project from NHPC 

"Thus, if the GST rate rationalisation happens on expected grounds, it is likely to drive a pick-up in auto demand from this festive season and is also likely to drive a re-rating for the sector," Motilal Oswal Financial Services said in a sector update.

 

Meanwhile, multi-year low inflation recorded in July, coupled with significant Reserve Bank of India (RBI) rate cuts, and favorable monsoon should help in demand sentiment as the year progresses. With favourable customer sentiment, upcoming festive season, and a robust pipeline of new product launches, the management of Hero MotoCorp is confident of sustaining and driving growth in the coming quarters.