Hero MotoCorp FY27: ₹1,500 Cr EV, Scooter Capacity Push

What Hero MotoCorp announced after FY26

Hero MotoCorp has outlined a capital expenditure plan of over ₹1,500 crore for FY27, with manufacturing expansion at the centre of its near-term strategy. The company said the spending will primarily go towards increasing capacity for electric vehicles and scooters, while also preparing for upcoming product launches. The plan was discussed in the company’s post-earnings call, where management indicated that it is shifting focus to segments where growth is accelerating. Alongside capacity, the outlay also includes investments in product development, supply chain strengthening, brand building, and digital technologies.

FY27 demand outlook: scooters seen outpacing motorcycles

Management expects India’s two-wheeler industry to grow at a high single-digit rate in FY27. It said growth should be supported by both motorcycles and scooters, although scooters are expected to grow a few percentage points faster. Hero MotoCorp also said it aims to outperform the broader market in FY27, supported by multiple product launches and updates across internal combustion engine and electric vehicle segments. The company’s commentary also pointed to a continuation of momentum seen in the second half of FY26.

Why scooters are a key focus area

Hero MotoCorp repeatedly flagged scooters as a structural growth area, referencing the industry trend where scooters have gained share by a couple of percentage points every year. In FY26, Hero’s scooter volumes grew 48% year-on-year, indicating strong demand in this category. To align supply with demand, the company said it is doubling scooter capacity, with specific actions already underway across key models.

ICE scooter capacity ramp: Destini and Xoom

Hero MotoCorp said it has already increased production capacity for the Destini scooter by 50%. It is also in the process of doubling production capacity for the Xoom range. Management described these steps as necessary because some scooter models are performing strongly and require additional capacity support. The company also said scooter production capacity is being doubled to meet demand.

Vida EV scale-up: capacity increases in months

A large part of the FY27 capex is aimed at scaling the electric two-wheeler business under the Vida brand. The company said its EV manufacturing capacity is set to rise by 50% over the previous quarter within the next month. It also plans to double EV manufacturing capacity by the end of the year. In a separate update on current scale, Hero MotoCorp said it has ramped up EV manufacturing capacity to 25,000 units per month from 15,000 units per month. Another stated target mentioned was to reach over 50,000 units per month this year as part of the doubling plan.

Sri City plant in Andhra Pradesh: expansion underway

Hero MotoCorp is preparing to double EV manufacturing capacity at its Sri City plant in Chittoor, Andhra Pradesh. The company’s comments align with its plan to introduce multiple new electric two-wheelers under the Vida brand. Management said it is investing in capacity expansion given the momentum it is seeing for Vida.

FY26 performance signals: EV volumes up 2.5x

Hero MotoCorp said EV scooter volumes grew 2.5 times during FY26, albeit on a low base. The company positioned this as early traction that supports the case for accelerating capacity and widening the product pipeline. The focus on EVs and ICE scooters follows what the company described as a strong FY26 performance, after which it sharpened its attention on higher-growth segments.

Beyond factories: digital tech, low-emission powertrains

The ₹1,500 crore FY27 outlay spans more than capacity expansion. The company said it will invest in connected vehicle platforms and GenAI-led customer interfaces. It also highlighted work on low-emission powertrains, including flex-fuel options, alongside EVs. On the commercial side, the capex will support new launches across EVs, premium motorcycles, and scooters, and continued spending on brand building.

Aftermarket push: second global PATH centre

Hero MotoCorp also plans to invest over ₹700 crore to set up a second global PATH (Parts, Accessories, and Merchandising) centre in southern India. The stated objective is to strengthen its accessories and aftermarket business. The company has also spoken about the opportunity in parts and accessories given its large installed base.

Key numbers and targets at a glance

What to watch in FY27

Hero MotoCorp’s FY27 plan is built around scaling capacity where demand is strengthening, particularly scooters and Vida EVs, while also preparing for a wider set of launches. Management said scooters should grow faster than motorcycles in FY27, and it expects overall industry growth to remain in the high single digits. It also pointed to external pressures such as higher commodity costs linked to the West Asia conflict, while reiterating its margin guidance. The next set of data points to track will be how quickly capacity ramps translate into higher volumes, and how the company progresses on its stated expansion timelines and new launch pipeline.