Overview

Hero Motors Limited is an automotive-tech company that manufactures high precision powertrain solutions, drivetrain components, gears & transmission and alloys for global mobility market. There has been confusion and investors must be able understand Hero Motors Limited is not Hero MotoCorp – they are separate legal entity under the Hero Motors Group controlled by Munjal Family. HMC group is a conglomerate with business segment across automotive components, E-mobility cycles, real estate and premium retail with group revenue crossing $700 million. Earlier the group was in JV with global partner – Briggs & Stratton, subsequently it evolved independently. 

Hero Motor’s Limited unlisted share has gained traction recently because SEBI has approved its IPO in September 2025, EV transition is accelerating, the company is differentiated from other players as it is building EV powertrain capability years before others even considered the shift. 

What Marken Does?

Hero Motors solves the hardest problem in mobility segment –engineer high-precision and high-performance transmission systems for traditional vehicles, and now EV – featuring completely different mechanics. The company operates in two business verticals – Powertrain solutions and Alloys & Metallics – enabling it to deliver fully integrated systems.

1. Powertrain Solutions: Gears & Transmission (G&T)

They design and manufacture end to end transmission systems for two wheelers, cars, commercial vehicles, aerospace, marine, off-road vehicles and specialty EVs. In 2023, they had established state of the art gearbox assembly facility in Thailand to serve global ICE and EV market. 

Products under this segment:

• Design and Validation Services 

• ICE Gearbox

• EV Gearbox

• E-Axle

• Gearset Assembly

• Gear and Shaft Components

1. Powertrain Solutions: Bike Powertrain (BPT)
   This division exclusively focuses on EV space, they supply CVT systems, electric motors, and integrated electric drive units for micro mobility market. 

Products under this segment:

• Continuous Variable Transmission (CVT)

• Electric Motors

• Electric Drive units

1. Alloys & Metallics 

Under this business segment, hero manufactures wide range of lightweight alloy components for automotive and two-wheeler segments including but not limited to ICE and EV platforms. 

Products under this segment:

• Structural Components 

• Alloy Frames 

• Suspension Forks, Wheel Rims, BB Catridges &Seats

Revenue Highlihts?

Revenue by Customer

Hero MotoCorp, BMW AG, Enviolo, HWA AG, Makino Auto Industries Private Limited, and Ducati are the top customers of Hero Motors Limited and their demand for high quality and high-performance auto components has increased over the time – this increased demand is reflected in the company’s topline performance till FY24. 

The top 10 customers constitute 74.46% of company’s total revenue (9M FY25). The concentration has been noticed consistently high ranging from 76.96% to 88.84% in FY22, FY23, and FY24. This represents structural risk and majority of revenue depends upon top 10 customers, any lost contract could severely impact the topline. 

Revenue by Geography

Revenue coming from Europe accounts for 26.27% of total revenue (9M FY25), following 29.33% in FY24, 32.47% in FY23, and 29.34% in FY22. 

During FY24, the company has generated INR 439.4 Cr from international clients representing almost 41% of total revenue. This signifies geographic concentration risk and dependence on international customers. Any breakage in deal pipelines due to any reasons: economic, geopolitical or any other, may severely impact revenue thus profitability. 

Revenue & Profit Trends

• Topline showed improved performance till FY23 then slowed and stagnated, in FY26 the company reported 1090 Cr in revenue – a slight improvement from FY25 INR 1064 Cr. 

• Profit After Tax dropped from 99 Cr in FY23 to 33 Cr in FY26 due to drop in high margin export volume combined with unabsorbed fixed manufacturing costs from recent factory expansion. 

Competitive Landscape

Hero Motors operates in a B2B automotive engineering and high precision components manufacturing space. The competitive landscape of Hero Motors is shaped by combination of high-tech mobility players and tier 1 auto component manufacturers. As per DRHP filed by company some of the listed peers are Sona BLW Precision Forgings (Sona Comstar), Endurance Technologies, UNO Minda, CIE Automotive India, and Varroc Engineering.

The competitive positioning of Hero Motors can be interpreted as follows:

Geographic Mix & Export Exposure

The Positioning: Hero Motors has high exposure to export and global premium markets, almost 41% of total revenue comes from international clients. 

Vs Peers: UNO Minda (14.02%) and Endurance Technologies (25.96%) have lesser global footprint than Hero Motors. However, it closely aligns with CIE automotive (43%) and Sona BLW (57.70%). 

Technological Edge and R&D Capability

The Positioning: Hero Motors outspends few of its listed peers in R&D expenditure as a percentage of revenue, it supports specialized E-mobility division and end-to-end prototyping. 

Vs Peers: In EV powertrain and high-precision, high performance gear space its closest competitor is Sona BLW that leads global EV market.

Operational Efficiency and Inventory Control

The Positioning: One of the kye operational risk of Hero Motors is asset management, it has lower asset turnover ratio than its peers and 62 to 71 inventory holding days.

Vs Peers: Listed peers have better inventory control with Endurance Technologies (31 days), UNO Minda (43 days), and CIE India (46 days). One of the reasons for subpar operational efficiency is front loading of capital expenditure into rapid factory expansion. 

Profitability Margin and Financial Scale 

The Positioning: Hero Motors has been able to match technological capabilities as its peers’ but lags behind in terms of profitability margin and financial scale. It runs on leaner financial margins with Net Profit Margin of 3.03% (FY25), Operating Profit Margin of 8.13% (FY25).

Vs Peers: Sona BLW, UNO Minda and other peers enjoy premium market valuation due to efficient asset management capabilities and double digit profitability margins. 

Funding & Valuation 

Promoters & Management 

Promoters

• O.P. Munjal Holdings

• Bhagyoday Investments

• Hero Cycles Limited

Management 

• Pankaj M. Munjal (Chairman): Over 38 years of experience

• Amit Gupta (MD & CEO): Over 20 years of experience

• Utkarsh Sanghi (CFO): Over 23 years of experience

• Dhiraj Kapoor (Company Secretary & Compliance Officer): Over 23 years of experience