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

What Hero MotoCorp announced

Hero MotoCorp has outlined a capital expenditure plan of over ₹1,500 crore for FY27, focusing on manufacturing expansion in scooters and electric vehicles (EVs). The plan was detailed by CEO Harshavardhan Chitale during a post-earnings interaction with analysts. The company said the spending is aimed at expanding capacity where demand is strong, particularly in its scooter portfolio. It is also stepping up EV manufacturing under its Vida brand through phased capacity additions. Separately, the company has committed over ₹700 crore to build a global parts centre in South India. Taken together, the announcements signal a capacity-led strategy across products and supply chain support.

Scooter capacity: from a 60,000-a-month run rate to a bigger target

Chitale said Hero MotoCorp is currently at a “60,000-odd” monthly scooter volume run rate. When asked whether doubling capacity could imply moving closer to 1 lakh units a month, he said that is the company’s ambition. The company’s FY27 capex is intended to support this step-up, especially for models that are “doing very well.” Management positioned the scooter ramp-up as a response to demand, not a routine incremental expansion. The company’s statements suggest a focus on execution at the model level, rather than a single blanket capacity number. It also indicates a sharper push into the scooter segment, which is one of the key growth pools in India’s two-wheeler market.

ICE scooter expansion: Destini and Xoom

In internal combustion engine (ICE) scooters, the company has already raised capacity for the Destini model by 50%, according to Chitale. He also said the company is in the process of doubling Xoom capacity. These steps are presented as targeted actions within the broader plan to double scooter production capability. Management linked the capacity increases to specific models that are performing strongly. The company did not disclose the location or line-wise details of the scooter expansions in the comments shared, but it clearly indicated that the changes are underway. The combination of a completed 50% increase (Destini) and an ongoing doubling (Xoom) gives a visible near-term map of where incremental volumes may be enabled.

EV manufacturing: phased scale-up under Vida

On the EV side, Chitale said the company is close to completing an expansion that will effectively add 50% more capacity than the last quarter. He added that in the subsequent quarters the company is in the process of further doubling capacity. Separately, management also said that EV capacity has already ramped up to 25,000 units per month from 15,000 units earlier. Chitale said the company will further double that capacity before the end of this year. The company also indicated it is preparing to double EV manufacturing capacity at its Sri City plant in Chittoor, Andhra Pradesh. These statements point to a step-by-step approach rather than a one-time jump, with near-term and later-phase expansions stacked.

Where the ₹1,500 crore capex will be used

Hero MotoCorp said the fresh FY27 capital expenditure will primarily be directed towards capacity expansion in scooters and EVs. It also said the outlay will support product development, brand building, and strengthening of global business. In some descriptions of the plan, the company’s investments were also linked to digital technologies and preparation for upcoming product launches across EVs, premium motorcycles, and scooters. The central theme across these uses is readiness for higher volumes and a broader launch pipeline. The company’s messaging makes scooters and EVs the most immediate manufacturing priorities, while positioning the rest of the spends as enabling investments.

Supply chain support: ₹700 crore global parts centre in South India

Alongside manufacturing capacity, the company has committed over ₹700 crore to build a global parts centre in South India. Chitale described it as a second parts centre intended to support expansion of the parts and accessories business. While the company did not provide timelines or operational metrics for the facility in the comments shared, the intent is to strengthen parts availability and backend capability. For a large two-wheeler maker, parts distribution and accessories can influence customer experience, service turnaround times, and dealership performance. The investment also signals that the capacity push is being paired with infrastructure that supports the broader ecosystem.

Key numbers and status snapshot

Why the plan matters for investors and the two-wheeler market

The announcements place scooters and EVs at the centre of Hero MotoCorp’s near-term manufacturing agenda. In scooters, the company is explicitly linking capex to models that are showing strong traction, with the ambition of lifting monthly scale meaningfully from the current run rate. In EVs, the company has provided a clearer capacity pathway, citing an increase from 15,000 to 25,000 units per month and outlining additional doubling steps. For investors, the key takeaway is that FY27 spending is not just maintenance capex but tied to measurable capacity outcomes. The added parts centre investment also indicates a parallel effort to improve supply chain readiness as volumes and product variety expand. What remains to be watched is how quickly the company converts the announced capacity additions into sustained retail volumes across scooters and the Vida EV line.

Conclusion

Hero MotoCorp’s FY27 plan combines over ₹1,500 crore of capex to expand scooters and EV manufacturing with a separate ₹700 crore-plus commitment for a global parts centre in South India. Management says scooter capacity is being doubled, with Destini capacity already raised by 50% and Xoom capacity doubling in progress, while EV capacity under Vida is being expanded in phases after rising from 15,000 to 25,000 units per month. The next milestones will be the completion of the near-term EV expansion cited as 50% higher than the last quarter and the further doubling steps management has said are planned over the coming quarters and before the end of this year.