Hero MotoCorp posts highest-ever quarterly revenue as GST cuts spur demand

Hero MotoCorp, India's largest two-wheeler maker, on Thursday said its profit rose 15% year-on-year to ₹1,275 crore in the third quarter of financial year 2026 (FY26), while revenue climbed 21% to ₹12,784 crore.

The record quarterly revenue was driven by a 16% rise in sales to 1.69 million units, as the late-September GST cuts came into full effect during October–December.

“Conducive macroeconomic factors and favourable GST 2.0 tailwind helped in revival of rural demand, which further drove consumer traction for motorcycles, and growth for the economy," Vivek Anand, chief financial officer at Hero MotoCorp, said in a statement on the quarterly results.

Excluding a one-time impact of ₹119 crore from the new labour codes, the New Delhi-based company posted a net profit of ₹1,439 crore, its highest-ever for a quarter.

TVS, Bajaj Auto also clock all-time highs

Hero’s numbers are in line with TVS and Bajaj, which recorded their own highest-ever quarterly revenue and profits during the October-December period. Hosur-based TVS saw its consolidated net profit jump 46% year-on-year to a record ₹891 crore during the October to December quarter, while Pune-based Bajaj Auto posted a 25% increase in consolidated net profit to ₹2,749 crore.

TVS’ revenue grew 33% year-on-year to ₹14,745 crore while Bajaj Auto’s revenue rose 23% to ₹16,640 crore.

Shares of Hero, TVS and Bajaj Auto have risen 6%, 7% and 12%, respectively, since the start of the festive season in October, outperforming the Nifty Auto index, which is up 3% over the same period.

Exports, demand momentum lift outlook

Investor bullishness also acknowledges the fact that all the three companies have seen a strong growth in exports in the October-December quarter. While Hero saw a 41% rise in volumes, TVS saw a 35% jump in exports, while Bajaj Auto saw a 14% growth.

All the three two-wheeler makers have presented a bullish outlook, betting that the demand momentum will continue in the coming months.

Analysts have noted that the industry trends for January suggest that momentum in sales has only strengthened in the past few months.

“Retail trends remained strong across most segments, suggesting sustained momentum after the festive season. The export segment continued to witness strong traction across the CV, tractor and 2W segments. Most OEMs (original equipment manufacturers) reported numbers ahead of our expectations," analysts at Kotak Institutional Equities wrote in a 2 February note.

Industry growth beyond festivals

According to data from the Society of Indian Automobile Manufacturers (Siam), two-wheeler sales rose 17% to 5.7 million units during October-December, the highest-ever for the quarter, as festivals and GST cuts lifted demand.

“We have grown ahead of the industry, and we are very confident that this momentum will continue both on the industry side, and we will likely to do better than the industry growth in Q4," K.N. Radhakrishnan, director and chief executive at TVS Motor, had said during the earnings call on 28 January.

Joining the bullish commentary on demand, Bajaj Auto’s executive director Rakesh Sharma said on 30 January that the quality of growth has improved, as customers sought to upgrade their products during the quarter.

“The motorcycle industry moved from a tight negative zone into double-digit positive growth, it is also the quality of growth, with the upper segments outperforming the lower segments and which plays very well for us because our portfolio pivots on the proposition of trying to persuade the customers to upgrade," Sharma told reporters.

Sharma added that the momentum in the industry will continue as long as inflation rates remain under control.