Hero Moto Sees Sharpest Decline Since February — What Went Wrong?

Hero MotoCorp shares fell as much as 5.17% on Tuesday, marking their sharpest single-day drop since February 2025, after the company’s October sales numbers missed market expectations. The stock’s decline comes amid concerns over weakening domestic volumes and stretched valuations following a strong rally in recent months.

The country’s largest two-wheeler maker reported an 8% year-on-year decline in domestic sales, steeper than the Street’s estimate of a 3% drop. This was despite the overhaul in goods and services tax rates.

The firm's total domestic sales went down to 6.5 lakh units as compared to the previous year's 6.57 lakh units, according to an exchange filing by the company.

The automobile major's total two-wheeler sales for the period went down 6.4% at 6.36 lakh units year-on-year, compared to the previous year's 6.73 lakh units.

After the GST rate cut on two-wheeler motor vehicles (under 350 cc) from 28% to 18%, the firm implemented price cuts of up to Rs 15,743 on their Hero range of motorcycles.

The company's Karizma 210 bike saw the largest amount of savings as its price was reduced by Rs 15,743. The Xpulse 210 and Xtreme 250R models also saw similar notable price cuts by Rs 14,516 and Rs 14,055, respectively.

In the scooter segment, Hero MotoCorp reduced the prices of models such as Pleasure Plus, Destini 125 and Xoom 160.

Despite these substantial price reductions, the domestic sales numbers across the company's various two wheeler segments show that it has not spurred more sales of their products.

In contrast, peers such as Bajaj Auto, TVS Motor and Eicher Motors posted growth in the range of 8–13%, highlighting a widening performance gap in the sector.

Analysts attributed the fall in Hero’s shares to market share losses in key segments, coupled with limited earnings visibility in the near term. The stock has risen about 33% since August 2025, leaving valuations elevated. Hero MotoCorp currently trades at a 12-month forward price-to-earnings multiple of 19.5 times, higher than its five-year average of 18 times.

The scrip fell as much as 5.17% to Rs 5,475 apiece on Tuesday. It pared losses to trade 4.21% lower at Rs 5,306 apiece, as of 2:33 p.m. This compares to a 0.57% decline in the NSE Nifty 50 Index.

It has risen 27.63% in the last 12 months and 5.73% year-to-date. Total traded volume so far in the day stood at 1.93 times its 30-day average. The relative strength index was at 48.12.

With most positives already priced in, analysts see limited room for further upside. Consensus estimates suggest only around 5% potential gain from current levels, prompting investors to lock in profits amid concerns of slowing volume momentum and rising competition.