Hero MotoCorp rallies 4%, hits 8-month high; what's driving 2W stock price?

Hero MotoCorp stock rallied 7% in 2 days after the management said it expects the domestic 2W industry to sustain momentum, and sees double-digit industry growth in FY27.

Hero MotoCorp share price movement

 

Hero MotoCorp share price hit an eight-month high at ₹5,933, gaining 4 per cent on the National Stock Exchange (NSE) in Monday’s intra-day deals. In the past two trading days, the stock price of the two-wheeler (2W) company rallied 7 per cent after the management said it expected the domestic 2W industry to sustain momentum and pegged double-digit industry growth for FY27, up from the earlier guidance of high-single-digit. 

 

Currently, Hero MotoCorp quoted at its highest level since January 8, 2026. The stock hit an all-time high of ₹6,390 on December 5, 2025. 

 

 

In the past month, Hero MotoCorp outperformed the market by surging 20 per cent, compared to a 1.4 per cent rise in the Nifty 50.

 

What’s driving Hero MotoCorp stock price?

 

Hero MotoCorp saw a strong June quarter (Q1FY27), beating estimates across most parameters. The company also logged 22.7 per cent volume growth during the period, outperforming the sector (14 per cent). During Q1FY27, revenue was aided by volume as well as value growth. Operating performance remained resilient despite commodity headwinds. The company expects the momentum to continue into the September quarter.

 

Hero MotoCorp on Friday projected a near double-digit volume growth for India's 2W industry for the financial year 2026-27 (FY27), driven by sustained goods and services tax (GST)-fuelled demand. Moreover, export demand is expected to be strong, driven by expanding geographic footprint and new product launches. 

 

The 2W industry observed a dramatic surge in volume sales growth after the government significantly reduced the GST rates on automobiles last September, the management said.

 

Hero is sharply ramping up manufacturing capacity for electric scooters (e-scooters) to meet what it sees as strong demand for its Vida electric vehicle (EV) business. The company increased monthly EV capacity from 15,000 units at the end of FY26 to nearly 30,000 units currently and plans to take it to about 45,000 units before the end of FY27. 

 

Brokerages see more upside in Hero MotoCorp stock price?

 

“Hero MotoCorp’s Q1FY27 profit after tax at ₹1,450 crore beat our estimates thanks to a healthy margin performance, aided by strong control in other expenses. Margins fell only 110bp year-on-year (YoY) to 13.3 per cent despite a sharp contraction in gross margins,” analysts at Motilal Oswal Financial Services (MOFSL) said in the Q1 result update.

 

Hero MotoCorp further consolidated its leadership position in the 100cc segment. The ongoing positive rural sentiment bodes well for stable demand momentum for the company. Further, it is delivering a steady outperformance in scooters, both EV and ICE. Moreover, exports have started outperforming, albeit over a low base.  

 

Analysts at MOFSL project a compound annual growth rate (CAGR) of 10 per cent/8 per cent/9 per cent in revenue/earnings before interest, taxes, depreciation, and amortization (EBITDA)/PAT over FY26-28. It reiterated a BUY rating with a target price of ₹6,560 (based on 18x FY28E core EPS + ₹89/744 for Hero FinCorp/Ather after 20 per cent holding company discount).

 

Analysts at JM Financial Institutional Securities build in 11.8 per cent YoY volume growth for FY27E (10 per cent earlier), aided by strong growth in the scooter segment (with expanding capacity across both ICE and EV portfolios) and new product launches.

 

The brokerage firm expects near-term cost inflation, and estimate FY27 EBITDA margin at 14 per cent (14.7 per cent in FY26). Factoring in strong demand momentum and recent price hikes, analysts said they are revising EPS by c. 3 per cent for FY27E/28E. They maintained a  ‘BUY’ rating on the stock with a target price of ₹6,720 (earlier ₹6,180).  ALSO READ: Milky Mist IPO  |  Molbio Diagnostics IPO: GMP at 16%  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.