Auto stock in focus after reporting a 196% surge in VIDA registrations in FY26

Synopsis: -With VIDA registrations surging 196 percent in FY26 and monthly volumes hitting an all-time high of 21,434 units in March, Hero MotoCorp has moved from EV and also-ran to India’s fourth-largest electric two-wheeler brand, backed by record quarterly revenues, a 40 percent export surge, and a debt-free balance sheet that gives it room to keep investing.

Shares of the world’s largest motorcycle manufacturer returned to focus after the company closed FY26 with 6.83 million units dispatched, 10 percent higher than FY25, and its electric arm, VIDA, posted its highest-ever monthly registrations in the fiscal year’s final month. The full-year picture is one of broad-based recovery across EVs, scooters, and exports, arriving together for the first time in several years.

With a market capitalization of Rs. 1,06,281 crores, the shares of Hero MotoCorp were trading at Rs. 5,292 per share, up 1 percent from its previous day’s close price of Rs. 5,246 and it made an intraday high of Rs. 5,388 up 3 percent.

EV Segment: The Real Story

VIDA dispatched 144,330 units in FY26, up 196 percent from 48,738 units the year prior. In March 2026 alone, the brand recorded 21,434 VAHAN registrations, a 70 percent jump over February, pushing past Greaves/Ampere and ola to fourth place in the electric two-wheeler market. VIDA now holds a 10.30 percent full-year EV market share, behind TVS (341,513 units), Bajaj (289,349 units), and Ather (239,178 units).

Product quality is catching up to the volume story. The Vida V2 and VX2 ranked highest in J.D. Power’s 2026 India Two-Wheeler Initial Quality Study, an external validation the brand needed. Beyond scooters, Hero acquired a 36.67 percent stake in Euler Motors for Rs. 210 crore in April 2026, extending its EV presence into electric commercial vehicles. EV losses remain a near-term drag, roughly Rs. 208 crores absorbed in Q3 FY26 alone, but unit economics are improving each quarter, and the investment losses are narrowing as VIDA scales.

The valuation case rests on a visible discount to peers. Hero trades at roughly 20x earnings against Bajaj Auto at approximately 30x, and TVS Motor is considerably higher, trading at 62x. That gap has persisted for years, partly justified by Hero’s domestic market share slide from above 36 percent in the late 2010s to around 28.4 percent in FY26. 

The recovery is underway; Q3 FY26 marked the fourth consecutive quarter of ICE market share gains in core commuter segments and FII holdings have climbed from 27.05 percent in June 2025 to 29.44 percent by December 2025, signaling growing institutional conviction. Exports hit an all-time high of 402,786 units in FY26, up 40 percent YoY. Motilal Oswal maintains a Buy rating on the stock with a target of Rs. 6,205.

Financials and Business Overview

Q3 FY26 was Hero MotoCorp’s best quarterly outing on record: revenue of Rs. 12,487 crore (up 22 percent YoY), EBITDA of Rs. 1,275 crore (up 15 percent), and normalized PAT of Rs. 1,275 crore (up 15 percent YoY). EBITDA margins expanded 20-22 basis points to 14.7 percent despite absorbing significant EV investment costs. 

Hero MotoCorp, incorporated in 1984 and listed on BSE and NSE, holds strategic investments in Ather Energy and Euler Motors, with collaborations spanning Harley-Davidson and Zero Motorcycles. 

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