Hero MotoCorp FY27 capex: ₹1,500 cr to double scooters

What Hero MotoCorp announced

Hero MotoCorp has earmarked capital expenditure of over ₹1,500 crore for FY27 to expand manufacturing capacity, with scooters a key focus. The plan includes doubling scooter production capacity for models that are seeing strong traction, according to CEO Harshavardhan Chitale. The company also committed over ₹700 crore to build a global parts centre in South India to support parts and accessories expansion.

The updates were shared during an interaction with analysts, where management outlined near-term capacity actions across internal combustion engine (ICE) scooters and electric vehicles (EVs). The company’s comments also touched on demand conditions in April and early May, and how evolving geopolitical uncertainty could affect the two-wheeler market.

FY27 capex: where the money is headed

Chitale said the company has “committed over ₹1,500 crore of capex in FY27,” and that a key objective is to expand scooter capacity. He indicated that for some scooter models performing well, production capability is being doubled.

Alongside scooters, Hero MotoCorp said the capex will also support EV capacity expansion. Separate from manufacturing outlay, management highlighted an additional investment commitment of over ₹700 crore for a new parts centre, intended to strengthen the company’s parts and accessories business and global supply support.

Scooter scale-up: from a 60,000 monthly run rate

Hero MotoCorp currently has a “60,000-odd scooter volume run rate” per month. When asked whether doubling capacity could take monthly volumes closer to 1 lakh units, Chitale responded, “That’s our ambition.”

The statement frames the expansion as a supply-side push to align capacity with demand momentum in select scooter models. While the company did not provide a model-wise volume split, it did outline capacity actions for specific products in the ICE scooter portfolio.

ICE scooters: Destini up 50%, Xoom capacity being doubled

In ICE scooters, the company has already increased production capacity of its Destini model by 50%, Chitale said. He also stated that the company is in the process of doubling capacity for the Xoom scooter.

These steps suggest Hero MotoCorp is prioritising capacity additions for established and growth models rather than a broad-based, uniform ramp-up. Management linked the capex directly to scooters “doing very well,” indicating that capacity is being added where demand visibility is stronger.

EV manufacturing: 15,000 to 25,000 units, with more planned

On EVs, Chitale said the company is close to completing an expansion that will deliver 50% more capacity than the last quarter. He added that over subsequent quarters the company is in the process of further doubling capacity.

Hero MotoCorp’s EV manufacturing capacity has increased from 15,000 units per month to 25,000 units per month. The company plans to further double that capacity before the end of this year, according to the CEO. The expansion is aligned with Hero’s broader EV push under the Vida brand, which was referenced in the provided material as having logged 190% growth.

New global parts centre in South India

In addition to manufacturing expansion, Hero MotoCorp is investing in parts infrastructure. Chitale said the company is building a second parts centre to support the expansion of its parts and accessories business.

He told analysts that the company has committed over ₹700 crore for a global parts centre in South India. The company did not share timelines, location details beyond the region, or specific capacity metrics for the facility in the information provided.

Demand check: April and early May stayed steady

Commenting on demand conditions amid the West Asia war, Chitale said demand momentum continued through April and the first week of May, with “no softening of demand.” This indicates that, at least during that period, showroom offtake did not show an immediate slowdown tied to the geopolitical situation.

However, he also noted that the situation remains “ever evolving” and should be monitored due to the uncertainty it creates. Before the war broke out, the two-wheeler industry was expecting high single-digit volume growth in FY27, he added.

Key numbers at a glance

What this means for the two-wheeler market

Hero MotoCorp’s manufacturing plan highlights a sharper focus on scooters and EVs, segments where capacity constraints can quickly translate into lost sales if demand sustains. The scooter target implied by management’s ambition - moving from about 60,000 units a month toward 1 lakh - points to a meaningful scale-up if executed.

The combination of scooter capacity additions, EV manufacturing expansion, and a new parts centre suggests the company is building both production and after-sales support systems. At the same time, management’s remarks on demand monitoring reflect that macro uncertainty, including geopolitical events, could influence the industry’s expected high single-digit volume growth in FY27.

Conclusion

Hero MotoCorp’s FY27 plan centres on over ₹1,500 crore of capex to expand scooter and EV capacity, alongside over ₹700 crore committed to a new global parts centre in South India. Management said scooter capacity is being doubled for strong-performing models, with an ambition of approaching 1 lakh scooters a month from the current ~60,000 run rate. On EVs, the company outlined a near-term 50% capacity increase versus the previous quarter and a further doubling plan, after ramping from 15,000 to 25,000 units per month.

The next set of datapoints investors will track are the pace of capacity commissioning through the year, and whether demand stays firm as the broader market watches evolving geopolitical uncertainty.