New launches, electric vehicles thrust positive triggers for Hero MotoCorp

The June ’25 auto sales numbers suggest a modest recovery in volumes for two-wheelers (2W). But while exports were up 21 per cent year-on-year (Y-o-Y) to 117,000 units, domestic sales were down 13 per cent Y-o-Y. On wholesale basis (exports plus domestic), Bajaj Auto sales inched up 0.6 per cent Y-o-Y to 361,000 units, TVS Motor posted 21 per cent Y-o-Y growth to 402,000 units.

 

Hero MotoCorp’s (HMCL) June ’25 sales grew 10 per cent Y-o-Y to 556,000 units in a positive surprise but Q1FY26 volumes were down 11 per cent Y-o-Y. Royal Enfield volumes grew 22 per cent Y-o-Y to 89,509 units, with exports up 79 per cent Y-o-Y to 12,583 units. Despite the recovery in June ’25, 2W sales for the four listed players rose just 1 per cent Y-o-Y in Q1FY26 due to a weak April.

 

While May and June ’25 combined saw sales increase 7 per cent Y-o-Y for HMCL to 10,61,664 units in 2025 versus 10,01,571 units in 2024, April was poor with sales dipping by over 40 per cent to 305,400 units in April ’25 versus 533,585 in April ’24.

 

HMCL is pushing harder into electric vehicles (EVs) with its launch of the Vida VX2 (two variants) which is the only Indian 2W with a removable battery and using the strategy of BaaS (Battery-as-a-Service) as a key differentiator along with a lower price. The customer response in key urban markets will be a key monitorable. The company targets the doubling of EV-2W volumes hoping to take 12-15 per cent market share by end-FY26 and climbing to top 3 position in EVs by FY27.

 

The VX2 models are priced competitively against Bajaj Auto’s offerings. The BaaS concept reduces upfront price since the battery is not being sold but offered on rental plans at costs starting from ₹0.96/km. HMCL already offered Vida Lite, Plus and Pro models in its portfolio with battery capacities ranging from 2.2kWh to 3.9kWh at price points between ₹85,000-₹140,000.

 

The new launches strengthen the portfolio with the two new models priced very competitively at starting costs of ₹60,000 up (plus battery rentals). HMCL offers a comprehensive warranty of five years or 50,000km. Another model, the Vida V2 Pro is expected to receive PLI approval by July ’25, and the entire lineup will be PLI compliant by the end of 2025 calendar year. HMCL has 500 or so Vida outlets and is beefing up the charge network.

 

The VX2 features Hero’s signature software with features like remote immobilisation, Firmware over-the-air updates, smartphone syncing, and turn-by-turn navigation. The VX2 aims to offer rider comfort and practicality as well. It may appeal most to fleet operators who need to operate at scale and can leverage the expanding HMCL charging network (currently 3,600+ points). It’s less clear if the BaaS concept will appeal to retail owners, although the lower upfront costs may be attractive. 

 

HMCL’s export volumes outpaced domestic growth, rising 140 per cent Y-o-Y in June and motorcycle volumes increased by 8 per cent, while scooters were up 37 per cent on a lower base. There may be a small inventory build-up with domestic retail sales down 0.8 per cent Y-o-Y, implying 131,000 units with dealers out of a total of 525,000 at wholesale.

 

The analyst consensus on HMCL is mixed, but the June data and the new launches and EV thrust may be seen as positives.