Hero Motors’ HYM and Thailand plants used little capacity

Hero Motors reported capacity utilisation of 14.56% at its HYM Facility and 3.87% at its Thailand Facility in Fiscal 2026, against 72.71% across six facilities. HYM’s rate increased from 5.90% in Fiscal 2025, while Thailand’s fell from 7.45%, showing sharply different plant-level outcomes within the network.

Why were Hero Motors’ HYM and Thailand plants far below capacity?

Hero Motors’ HYM Facility used 14.56% of annual available capacity in Fiscal 2026, while the Thailand Facility used 3.87%. Capacity utilisation is actual production in the relevant fiscal divided by annual available capacity, according to the company’s disclosure. HYM’s rate rose from 5.90% in Fiscal 2025 and 2.11% in Fiscal 2024, whereas Thailand’s rate declined from 7.45% and 11.96%, respectively.

The two facilities moved in opposite directions year on year, but both remained well below the company-wide rate of 72.71% in Fiscal 2026. HYM’s utilisation increased by 8.66 percentage points from Fiscal 2025, while Thailand’s declined by 3.58 percentage points. Hero Motors says its capacity information is based on management assumptions and estimates considered by an independent chartered engineer.

How does Hero Motors’ capacity use compare across its network?

Hero Motors’ HYM Facility reported 14.56% utilisation in Fiscal 2026, compared with 78.53% at GB Nagar and 83.34% at Mangali. The disclosure gives HYM the same 14.56% rate in its Powertrain and Alloy & Metal categories. It does not provide a separate capacity calculation for Hero EDU, which designs integrated e-bike systems and sources components rather than being primarily engaged in component manufacturing.

The comparison shows why the 72.71% six-facility aggregate does not describe every plant’s operating position. GB Nagar’s combined utilisation rose to 78.53% in Fiscal 2026 from 76.61% in Fiscal 2025, and Mangali’s increased to 83.34% from 75.47%. HYM was 68.15 percentage points below the aggregate rate in Fiscal 2026, while Thailand was 68.84 percentage points below it.

Hero Motors calculates annual average available capacity using three shifts for all manufacturing facilities. The methodology assumes 300 working days for most facilities, but 247 working days on a full-financial-year basis for the HYM, Thailand and UK facilities. Capacity use is therefore measured against annual available capacity under that specified working-day and shift framework, not simply against installed capacity.

What explains Hero Motors’ low HYM capacity use?

Hero Motors says HYM and Spur capacity utilisation reflected subdued customer demand for products made at those facilities. The company cites HYM utilisation of 14.56% in Fiscal 2026 and 5.90% in Fiscal 2025, alongside Spur utilisation of 50.29% and 45.43%, respectively. The disclosure does not provide a separate explanation for Thailand’s decline to 3.87% in Fiscal 2026.

Customer demand can affect utilisation because requirements are not confined to one product type, according to Hero Motors. Changes in demand for particular products may require manufacturing-process and production-schedule changes, potentially resulting in overproduction of some products and underproduction of others. Hero Motors identifies product mix, consistent long-term demand, and supply-demand conditions in existing and target markets as factors affecting profitability and utilisation.

Thailand’s production history also matters when comparing the three fiscal years. The Thailand Facility started operations in October 2023, and its annual average available capacity and actual production reflect activity from that start date. Its rate then fell from 11.96% in Fiscal 2024 to 7.45% in Fiscal 2025 and 3.87% in Fiscal 2026, meaning the Fiscal 2026 level followed two earlier reported periods.

Which other Hero Motors facilities show the contrast?

Hero Motors’ Mangali Facility had the highest disclosed combined utilisation rate in Fiscal 2026 at 83.34%, followed by GB Nagar at 78.53%. Mangali reported 83.34% in both its Powertrain and Alloy & Metal categories. GB Nagar reported 88.25% in Powertrain and 74.99% in Sheet Metal, producing its 78.53% combined rate.

The UK Facility used 24.19% of capacity in Fiscal 2026, down from 31.25% in Fiscal 2025 and below its 26.16% rate in Fiscal 2024. Spur reached 50.29% in Fiscal 2026, up from 45.43% in Fiscal 2025 and 14.72% in Fiscal 2024. Hero Motors says Spur’s annual available capacity and actual production account for the start dates of its six major lines, which began between June 2022 and August 2024.

What would need to change for Hero Motors’ capacity use to improve?

Hero Motors’ HYM and Thailand rates would improve if actual production increased relative to annual available capacity. The company identifies consistent long-term customer demand, suitable product mix, and demand-supply conditions in existing and target markets as relevant factors. Customer requirements would also need to align with each facility’s production processes sufficiently to reduce product-level overproduction or underproduction.

The reported rates are not forecasts of future production. Hero Motors says installed capacity, annual average available capacity, actual production and utilisation rely on management assumptions and estimates reviewed by Deba Engineers & Consultants, an independent chartered engineer, in a certificate dated August 28, 2026. The company states that actual production and utilisation may vary significantly from annual installed and annual average available capacity.

Conclusion

Hero Motors’ 72.71% Fiscal 2026 aggregate combined high utilisation at Mangali and GB Nagar with low utilisation at HYM, Thailand and the UK Facility. HYM improved from 5.90% to 14.56% over one year, but Thailand declined from 7.45% to 3.87%, demonstrating that the consolidated rate masks substantial facility-level differences.

The next capacity disclosure will show whether customer demand, product mix and production scheduling raise output relative to available capacity at HYM and Thailand. Hero Motors has disclosed no specific production target for either facility, while its risk disclosure leaves demand conditions and the resulting capacity mismatch as unresolved matters.