Hero MotoCorp FY27 capex: ₹1,500 crore for EVs, scooters

What Hero MotoCorp is planning for FY27

Hero MotoCorp is stepping up investment with a planned capital expenditure of over ₹1,500 crore in FY27. The country’s largest two-wheeler maker said the spending will be used to expand manufacturing capacity in electric vehicles (EVs) and high-growth scooter segments, and to prepare for new product launches. Management told investors the capex is aimed at scaling areas where demand is strengthening, particularly electric scooters under the Vida brand and internal combustion engine (ICE) scooters. The plan comes after the company reported record revenue and profit in FY26, prompting a sharper focus on growth segments.

Scooter capacity expansion: focus on models doing well

In a post-earnings call, management said it is expanding scooter capacity because some models are performing strongly. The company said it is doubling its scooter capacity. It has already increased the capacity of its Destiny scooter by 50%. It also plans to double the capacity of its ICE scooter model, Zoom. Hero expects scooters to continue outpacing motorcycles in FY27, even as overall industry growth moderates to the moderate-to-high single digits.

EV push at the centre: Vida scale-up and plant expansion

A large part of the FY27 capex is focused on the rapid scale-up of Hero’s EV business under the Vida brand. Autocar Professional had reported that Hero plans to double electric two-wheeler manufacturing capacity at its Sri City (Chittoor, Andhra Pradesh) plant, alongside multiple new Vida models. Management said it is investing in EV capacity expansion and will double capacity from where it started last year “in a matter of a month.” It added that there will be further doubling later as it sees momentum for Vida.

Capacity trajectory: from 15,000 to 25,000 units a month

Hero said it recently ramped up EV manufacturing capacity to 25,000 units per month from 15,000 units per month. Management also noted that it is close to completing an expansion that will take capacity to 50% more than last quarter within a month, with further increases in the following months. On the demand side, Hero’s EV scooter volumes grew 2.5x in FY26, though the company described this as being on a lower base. The company’s stated actions indicate it is aligning production capability with early traction in EV scooters.

Industry context: two-wheelers grew 10%, EVs over 20%

Hero’s capacity plan is also framed by broader market trends cited in the update. The two-wheeler market grew about 10% in FY26 to cross 21 million units. Electric two-wheelers expanded at over 20% from a low base, taking EV penetration to roughly 6-7%. Penetration is expected to rise to 8-10% in FY27, supported by improving cost economics, fleet demand, and wider participation from established original equipment manufacturers (OEMs). This backdrop helps explain why Hero is increasing attention on EVs and scooters simultaneously.

What else the ₹1,500 crore capex includes

Hero said the FY27 outlay spans areas beyond pure capacity expansion. The company is preparing a pipeline of new launches across EVs, premium motorcycles, and scooters. It also plans continued investment in brand building and digital technologies. The company flagged work on connected vehicle platforms and GenAI-led customer interfaces, as well as low-emission powertrains including flex-fuel options. Separately, it will invest over ₹700 crore to set up a second global PATH (parts, accessories, and merchandising) centre in southern India to strengthen the accessories and aftermarket business.

FY26 financial and operating backdrop

Hero reported strong performance in Q3 FY26 (October to December 2025). Revenue from operations came in at ₹12,328 crore, up 21% year-on-year, while EBITDA was ₹1,810 crore, up 23% year-on-year, with an EBITDA margin of 14.7% (up 22 basis points). Reported PAT was ₹1,349 crore (up 12%), and normalized PAT was stated as ₹1,439 crore in one update (and ₹1,489 crore in another). The company recorded a one-time exceptional charge of ₹119 crore linked to the impact of new labour codes that took effect on November 21, 2025. It also declared an interim dividend of ₹110 per share.

FY27 starts with a sharp jump in dispatches

Hero MotoCorp reported total dispatches of 566,086 units in April 2026, nearly doubling from 305,406 units in April last year. VAHAN registrations were reported at 552,713 units, pointing to steady domestic demand across urban and rural markets. The company said its electric mobility arm, VIDA, registered 129% year-on-year growth, with dispatches more than doubling. Hero also expanded retail presence with 70 new touchpoints, including Premia outlets, taking the total to 132 across India. Exports rose too, with April exports at 33,653 units versus 16,882 units a year ago.

Key figures at a glance

Competitive landscape and why execution matters

Hero retained its position as India’s largest two-wheeler manufacturer amid tight competition from Honda, according to the update. It also noted rising competitive pressures in scooters, where TVS Motor and Suzuki Motorcycle India have gained share. Management indicated an aggressive product offensive across ICE and EV segments, with launches planned across scooters, commuter motorcycles, and premium motorcycles. Against this competitive backdrop, the FY27 capex plan is positioned as a support for capacity readiness, product cadence, and wider ecosystem investments such as accessories and digital platforms.

Conclusion

Hero MotoCorp’s FY27 capex plan of over ₹1,500 crore signals a sharper operational focus on scaling scooters and accelerating Vida’s EV ramp-up, alongside preparation for multiple launches. The company is pairing capacity expansion with investments in digital platforms, low-emission technologies, and an expanded PATH network, including a second centre in southern India. With April 2026 dispatches nearly doubling year-on-year, management is moving to align supply with demand signals across ICE and EV portfolios. The next set of updates investors are likely to track will be timelines for capacity milestones, the pace of Vida model launches, and execution of the broader FY27 investment program.