Hero MotoCorp hits 16-month low, stock down 24% from Feb high; here's why

Shares of Hero MotoCorp were down 2% to Rs 3,455.30 on the BSE in intra-day deal and were trading at its lowest level since November 2023.

Shares of Hero MotoCorp (HMC) hit a 16-month low at Rs 3,455.30, as the stock declined 2 per cent on the BSE in Monday’s intra-day trade in an otherwise firm market on growth concerns. The stock price of the world’s largest manufacturer of motorcycles and scooters traded at its lowest level since November 2023. 

 

The stock has shed 24 per cent from its previous month high of Rs 4,520.95, touched on February 1, 2025, and corrected by 45 per cent from its 52-week high of Rs 6,245 hit on September 24, 2024.

 

On January 31, 2025, HMC informed the stock exchange that the board has approved the appointment of Vikram Kasbekar, Executive Director, as the Acting Chief Executive Officer (CEO) effective May 1, 2025. Niranjan Gupta has stepped down as the CEO of the Company effective April 30, 2025, to pursue other opportunities.

 

Last month, Economic Times reported, HMC is dealing with multiple challenges. Its market share is at its lowest in a decade, key executives are leaving, and new product launches have not performed as expected. Competition from TVS Motor Company, Bajaj Auto, and Honda Motorcycle and Scooter India (HMSI) was increasing.

 

HMC has also lost other key executives in recent months. Chief Human Resources Officer Rachna Kumar left within a year of joining. Chief Technology Officer Arun Jaura, who led the development of premium bikes and electric vehicles (EVs), quit in April 2024. Chief Operations Officer Michael Clark left in October 2024 after four years with the company.

 

Meanwhile, in the first 11 months (April to February) of the financial year 2024-25, HMC sold 5.4 million two-wheelers, a 4.3 per cent increase from 5.13 million two-wheelers sold during the same period of FY24. 

 

However, the management anticipates momentum increase in the coming months owing to the upcoming marriage season and new product launches. The revival in the rural segment will be welcomed by HMC to bolster its presence in the 100- 110cc segment.

 

Factoring in April to December period (9MFY25) performance analysts at BOB Capital Markets lowered the volume estimates leading to earnings revision too. The brokerage firm cut FY26 and FY27 EBITDA/PAT estimates for HMC given the challenges from the competitive space and investments in EV.

 

However, analysts at Axis Securities said they are monitoring HMC’s roadmap in the EV product portfolio, including investments in Ather, the ramp-up of VIDA V2, and the launch of the sub-Rs 1 Lc Vida V2 Lite catering to mass markets; strategy in the mid-weight motorcycle segment amidst growing competition and expansion into new international markets. 

 

Additionally, government initiatives to enhance rural income, higher disposable income (as announced in the recent Union Budget), and the marriage season are expected to drive 2W industry growth, benefiting HMC, particularly in the entry and 125cc segments, the brokerage firm said.