Hero MotoCorp Q3 FY26: Revenue Soars 21%, Declares 5500% Dividend

Introduction

Hero MotoCorp, India's largest two-wheeler manufacturer, has announced a stellar performance for the third quarter of the financial year 2026. The company achieved its highest-ever quarterly revenue, driven by robust volume growth and an improved product mix. In a significant move for shareholders, the board has also declared a substantial interim dividend, reflecting the company's strong financial health and positive outlook.

Record-Breaking Financial Performance

The company's revenue from operations for the quarter ended December 31, 2025, surged by 21% year-on-year (YoY) to reach ₹12,328.38 crore, compared to ₹10,210.78 crore in the same period last year. This growth was underpinned by a 16% increase in sales volume. For the nine-month period of FY26, revenue grew by 10% YoY to ₹34,033.61 crore.

Profitability metrics also showed significant improvement. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for the quarter climbed 23% YoY to ₹1,810 crore. The EBITDA margin expanded by 22 basis points to 14.7%, attributed to a favorable product mix and better pricing.

Profitability and Shareholder Returns

Profit After Tax (PAT) for Q3 FY26 stood at ₹1,348.55 crore, a 12% increase from ₹1,202.84 crore in the corresponding quarter of the previous year. On a normalized basis, adjusting for exceptional items, the PAT was ₹1,439 crore, marking a 20% YoY growth. The company's Earnings Per Share (EPS) for the quarter improved to ₹67.40 from ₹60.15 a year ago.

Underscoring its strong cash flow position, the Board of Directors approved an interim dividend of 5500%, which translates to ₹110 per equity share of ₹2 face value. This substantial payout is a clear indicator of the company's confidence in its sustained performance and its commitment to rewarding its shareholders.

Strategic Push into Electric Vehicles

Continuing its strategic focus on electrification, Hero MotoCorp announced an additional investment of up to ₹275 crore in Euler Motors Private Limited. This investment, to be made in tranches, will increase Hero MotoCorp's stake in the electric three and four-wheeler manufacturer to approximately 36%. This move signals a deeper commitment to building a comprehensive EV portfolio and capturing growth in the rapidly expanding electric mobility ecosystem. Euler Motors reported a turnover of ₹191 crore in FY25.

Operational Highlights and Segment Growth

Hero MotoCorp sold 16.97 lakh units of motorcycles and scooters in Q3 FY26, a 16% increase YoY. The company's ICE scooter segment was a standout performer, registering an impressive 55% growth. The EV business, under the VIDA brand, also gained traction, securing an 11% market share.

Exports surged by 41% YoY, driven by the company's expansion into new international markets. Furthermore, the Parts, Accessories, and Merchandising (PAM) business delivered its highest-ever quarterly revenue of ₹1,673 crore, highlighting the strength of its aftermarket services.

Sustainability and Cost Efficiency

In line with its sustainability objectives, the company is investing in solar power projects to enhance its use of renewable energy. An investment of up to ₹3.25 crore is planned for a solar power wheeling project at its Haridwar plant, with an additional ₹4.67 crore allocated for similar initiatives at its Neemrana, Global Parts Centre, and Jaipur facilities. These projects are expected to reduce operational costs and carbon footprint.

Management Outlook and Regulatory Landscape

Vivek Anand, the Chief Financial Officer, expressed optimism about the company's trajectory. He credited the strong performance to operational excellence, a better product mix, and a supportive macroeconomic environment, including a revival in rural demand. However, the company is currently evaluating the potential financial impact of the new Environment Protection (End-of-Life Vehicles) Rules, 2025. The framework for implementing these rules is still pending, creating some regulatory uncertainty regarding Extended Producer Responsibility (EPR) obligations.

Conclusion

Hero MotoCorp's Q3 FY26 results demonstrate a company firing on all cylinders. Record revenue, robust profit growth, and strong performance across all key segments paint a picture of operational strength. The significant dividend payout and strategic investments in the EV space further reinforce its position as a market leader preparing for future growth. While regulatory changes present a point to watch, the overall outlook remains constructive, supported by strong demand and strategic foresight.