Hero MotoCorp share price in focus: Shares of Hero MotoCorp, one of the world’s largest two-wheeler manufacturers, ended Friday’s intraday session (August 22) lower, slipping 2% to ₹ 4,997.90 apiece as investors booked profits after a sharp rally that had made it the best-performing auto stock in August.
Over the last 16 trading sessions, the stock has advanced 17.6% and even touched a nine-month high of ₹5,165 apiece on August 19, offering relief after largely remaining sideways over the previous two months. The August rally is the strongest monthly gain for the auto stock since November 2023.
The recent upswing has been supported by better-than-expected June quarter results, driven by stronger exports and higher vehicle prices. The rally accelerated after the government proposed GST rate cuts, fueling expectations that Hero MotoCorp could be among the major beneficiaries, with analysts suggesting this could help revive sales in the domestic market, which have remained sluggish in recent quarters.
According to media reports, the government is considering lowering GST on automobiles from the current 28% to 18%, which analysts believe would reduce ownership costs and boost demand if approved as proposed.
Market share recovery in Q1
Auto demand has been weak in the first four months of FY26, with all segments except tractors trailing growth estimates. In terms of volumes, the domestic two-wheeler industry is down 4% YoY missing earlier projections of high single-digit growth.
To offset the weak domestic trend, companies including Hero MotoCorp have shifted focus to exports, which supported growth in the June quarter, with the company’s global business expanding 27% YoY and continuing the strong momentum from FY25.
Notably, in a challenging quarter, Hero MotoCorp regained lost market share, which rose to 30.9% in Q1FY26, an 11-quarter high with a 100-basis point sequential gain. Analysts attribute this recovery to strong traction in the Deluxe 100cc segment and renewed momentum in the 125cc scooter and motorcycle categories, such as Destini 125, Xoom 125, and Xtreme 125.
In the EV segment, Hero’s market share doubled YoY to 7% in Q1FY26 and further climbed to 10% in July, supported by the successful rollout of the VIDA VX2, according to domestic brokerage Axis Securities.
Meanwhile, in the Deluxe 125cc segment, the company recently launched the Glamour X 125, which it claimed to be the country’s most futuristic 125cc motorcycle.
Monsoon, tax relief and export recovery to aid growth
Axis Securities expects two-wheeler sales volumes to sustain mid-to-high single-digit growth in FY26E, supported by new premium launches, an extended replacement cycle, and export recovery. A favourable monsoon, income tax relief, and higher rural spending are also expected to aid demand for entry-level motorcycles.
The expected GST rate cut by Sep-Oct’25 to 18% (from 28% currently) in 150cc/350cc (unclear as per media reports) and lower engines will be a booster/immunity shot in the post covid era, which may result in the revival of the domestic entry-level 2W industry, said the brokerage.
“The government’s proposal to rationalize GST rates is an addition to several tailwinds for the sector, such as positive progress of the monsoon driving up rural sentiment, income tax benefits, and interest rate cuts. Thus, if the GST rate rationalization happens on expected grounds, it is likely to drive a pickup in auto demand from this festive season,” said Motilal Oswal.
Technical View: Hero MotoCorp could touch ₹5,400, says analyst
Anshul Jain, Head of Research at Lakshmishree, said, “Hero MotoCorp has broken out above the major resistance level of 4865, confirming a strong bullish setup. The last two sessions of correction appear healthy and are driving the stock back toward retesting the breakout point at 4865.”
“If the retest holds and supportive bullish price action emerges around this zone, it will provide a high-conviction opportunity to accumulate aggressively. Momentum indicators remain aligned with the breakout, and institutional participation is evident in recent volumes. A sustained move above 4865 post-retest will likely fuel a sharp rally, with immediate upside potential towards the 5400 mark,” he further added.