Hero Motors’ Powertrain Gains Mask Alloy & Metallics Loss

Hero Motors Limited reported a Rs 15.903 crore Alloy & Metallics segment loss in FY26, reversing a Rs 6.231 crore profit in FY25, while Powertrain lifted segment result to Rs 104.086 crore from Rs 67.569 crore. The contrast shows that Powertrain, rather than both operating segments, drove the group’s FY26 growth.

Why did Alloy & Metallics report a loss in FY26?

Alloy & Metallics recorded a Rs 15.903 crore segment loss in the year ended March 31, 2026, despite revenue being broadly unchanged from FY25. The segment had delivered a Rs 6.231 crore profit in FY25 and a Rs 29.874 crore profit in FY24, so the FY26 result was a Rs 22.134 crore deterioration from the preceding year.

Hero Motors identifies Alloy & Metallics and Powertrain as its two business segments, based on product nature, risks and returns, organisational structure and internal financial reporting. The segment note does not provide individual cost lines or a specific explanation for the Alloy & Metallics reversal. It states that directly attributable revenue and expenses are assigned to segments, while joint revenue and expenses are allocated on a reasonable basis.

Alloy & Metallics total revenue fell 0.9% to Rs 550.598 crore in FY26 from Rs 555.346 crore in FY25, after standing at Rs 544.155 crore in FY24. External gross sales declined to Rs 535.573 crore from Rs 541.115 crore, while other operating income rose to Rs 15.025 crore from Rs 14.231 crore. The limited revenue movement means the segment schedule does not attribute the loss to a large disclosed sales decline.

The scale of the earnings change exceeded the movement in sales. Alloy & Metallics external gross sales decreased by Rs 5.542 crore from FY25 to FY26, compared with the Rs 22.134 crore decline in segment result. A return to a positive segment result would depend on directly attributable income and expenses, together with allocated joint items, producing a surplus under Hero Motors’ segment-accounting approach.

How did Powertrain drive Hero Motors’ FY26 growth?

Powertrain drove Hero Motors’ FY26 revenue growth and segment earnings increase, reporting Rs 637.753 crore of total revenue and Rs 104.086 crore of segment result. Total revenue rose 19.4% from Rs 534.247 crore in FY25, while segment result increased 54.0% from Rs 67.569 crore.

Powertrain’s FY26 external gross sales increased to Rs 617.902 crore from Rs 509.433 crore in FY25, an increase of Rs 108.469 crore. Other operating income declined to Rs 19.851 crore from Rs 24.814 crore, but the growth in external sales lifted total revenue. In FY24, Powertrain had total revenue of Rs 520.231 crore and segment result of Rs 67.027 crore.

Powertrain accounted for 53.7% of Hero Motors’ Rs 1,188.351 crore FY26 total revenue, compared with 49.0% of Rs 1,089.593 crore in FY25. That change made Powertrain the larger of the two reported operating segments in FY26, whereas Alloy & Metallics accounted for Rs 550.598 crore of revenue and reported a loss.

Total revenue combines external gross sales and other operating income, while segment result is the measure disclosed in Hero Motors’ segment note. From FY25 to FY26, Powertrain added Rs 103.506 crore of revenue and Rs 36.517 crore of segment result, offsetting the decline in Alloy & Metallics earnings at the segment level.

What did the segment split mean for group profit?

Hero Motors’ restated net profit after tax rose to Rs 41.168 crore in FY26 from Rs 32.796 crore in FY25, an increase of 25.5%, even as Alloy & Metallics moved into loss. Restated net profit after tax was Rs 17.035 crore in FY24, meaning FY26 profit was more than double the FY24 reported amount.

Profit before tax rose to Rs 61.004 crore in FY26 from Rs 39.076 crore in FY25 and Rs 24.312 crore in FY24. Finance cost also increased, reaching Rs 40.838 crore in FY26 compared with Rs 36.984 crore in FY25 and Rs 34.313 crore in FY24. The segment disclosure reports finance cost only at the consolidated total level and does not assign it between Powertrain and Alloy & Metallics.

The segment schedule reports total segment results of Rs 88.183 crore in FY26, Rs 73.800 crore in FY25 and Rs 96.901 crore in FY24. It also separately presents unallocated expenses, net of income, of Rs 13.659 crore in FY26 and Rs 2.259 crore in FY25, while the FY24 line is shown as Rs 38.276 crore in brackets. Hero Motors defines unallocated expenses as expenses not directly attributable to the business segments.

As presented in the schedule, operating profit was Rs 101.842 crore in FY26, compared with Rs 76.060 crore in FY25 and Rs 58.625 crore in FY24. The figures show that higher Powertrain earnings coincided with higher group profit, but the segment data does not establish that both businesses contributed to the increase because Alloy & Metallics reported a negative FY26 segment result.

How were assets, spending and sales exposure divided?

Powertrain held Rs 899.881 crore of segment assets at March 31, 2026, compared with Rs 325.585 crore for Alloy & Metallics. Of the Rs 1,225.465 crore combined segment assets, Powertrain represented 73.4% and Alloy & Metallics represented 26.6%; the comparable FY25 segment-asset amounts were Rs 666.173 crore and Rs 256.182 crore, respectively.

Hero Motors reported FY26 capital expenditure of Rs 63.081 crore for Powertrain and Rs 21.920 crore for Alloy & Metallics. Both were below FY25, when Powertrain capital expenditure was Rs 103.935 crore and Alloy & Metallics spending was Rs 32.008 crore. Total group capital expenditure declined to Rs 85.001 crore in FY26 from Rs 135.943 crore in FY25 and Rs 136.995 crore in FY24.

Customer concentration remained material in FY26. Customer A generated Rs 431.482 crore and Customer B generated Rs 125.104 crore, together amounting to Rs 556.586 crore, or 48.3% of Rs 1,153.475 crore in external gross sales. Hero Motors identifies these customers as each representing more than 10% of total revenue, but does not assign either customer to Powertrain or Alloy & Metallics.

India accounted for 58.64% of FY26 sales and exports accounted for 41.36%, compared with 59.06% and 40.94% in FY25. Non-current operating assets were Rs 529.750 crore in India and Rs 201.236 crore outside India in FY26. For this disclosure, non-current operating assets include property, plant and equipment, right-of-use assets, capital work in progress and intangible assets.

Conclusion

Hero Motors’ FY26 profit increase was led by Powertrain rather than shared across its two operating segments. Powertrain added Rs 36.517 crore of segment result from FY25, while Alloy & Metallics lost Rs 22.134 crore of segment result and ended FY26 with a Rs 15.903 crore loss. The group nevertheless increased restated net profit after tax by Rs 8.372 crore to Rs 41.168 crore.

The unresolved issue is what caused Alloy & Metallics’ loss, because the segment note provides no line-by-line cost or margin explanation. Subsequent reporting will show whether the segment can restore positive results and whether Powertrain can maintain growth after its FY26 capital expenditure fell by Rs 40.854 crore from FY25; sales exposure to Customer A and Customer B, which together accounted for 48.3% of FY26 external gross sales, also remains relevant.