Hero MotoCorp’s Leadership Transition: A Strategic Catalyst for Operational Efficiency and EV-Driven Growth

Hero MotoCorp’s recent leadership transition—from Niranjan Gupta to Vikram Kasbekar as acting CEO—has sparked renewed interest among investors, positioning the company at a pivotal juncture in its evolution. The shift underscores a strategic emphasis on operational continuity, innovation, and market expansion, particularly in India’s rapidly growing electric vehicle (EV) sector. For investors, this transition offers a compelling case to reassess the stock’s long-term potential, supported by robust financial performance, a clear innovation roadmap, and a disciplined approach to succession planning.

Strategic Succession and Operational Continuity

Niranjan Gupta’s tenure as CEO (2023–2025) laid a strong foundation for Hero MotoCorp’s financial resilience. Under his leadership, the company achieved record revenue of ₹40,756 crore in FY2024 and a 16.18% year-on-year increase in profit after tax to ₹4,610 crore [3]. Gupta’s focus on global partnerships, such as the collaboration with Harley-Davidson, and his strategic push for premiumisation (e.g., reviving the Karizma brand) demonstrated a clear vision for profitability and brand diversification [1]. His departure in May 2025, however, did not disrupt operational momentum.

Vikram Kasbekar, the newly appointed acting CEO, brings a 25-year operational and technical expertise to the role. As Executive Director – Operations and former Chief Technology Officer, Kasbekar has been instrumental in developing Hero’s New Model Centre and sustainable manufacturing strategies [1]. His appointment reflects the company’s commitment to internal talent grooming—a hallmark of its succession planning. Early indicators under his leadership are promising: in Q1 FY2026, Hero maintained a stable EBITDA margin of 14.4% despite a temporary production halt, while achieving a 30.9% market share in two-wheelers [4]. This resilience highlights Kasbekar’s ability to balance cost discipline with market expansion.

Innovation and EV-Driven Growth

Hero MotoCorp’s pivot to EVs is central to its long-term growth strategy. In 2025, the company invested ₹525 crore in Euler Motors to enter the electric three-wheeler market, a segment projected to grow at a 33.1% CAGR through 2032 [2]. Kasbekar’s leadership has accelerated this push, with the launch of the VIDA VX2 and a pioneering Battery as a Service model, which could redefine customer adoption barriers. By July 2025, Hero’s EV market share surged to over 10%, up from 3.78% in CY2024 [3].

The company’s localization strategy further strengthens its competitive edge. For instance, the Creta Electric’s battery pack assembly is being localized to reduce costs, a move expected to improve margins in the medium term [4]. These initiatives align with broader industry trends, where connected motorcycle markets are forecasted to expand from $0.46 billion in 2025 to $3.40 billion by 2032 [2]. Hero’s R&D investments—up to $180.81 million in 2023—position it to capitalize on these trends while maintaining its dominance in the traditional two-wheeler segment [1].

Market Positioning and Competitive Dynamics

While Hero MotoCorp faces stiff competition from Bajaj Auto and TVS Motor, its strategic focus on EVs and premiumisation differentiates it. In Q1 FY2026, Bajaj Auto reported a 14% year-on-year profit increase, driven by its Chetak EV, which now accounts for 20% of domestic revenue [5]. TVS Motor, meanwhile, holds a 29% scooter market share, bolstered by its iQube EV’s 41% YoY sales growth [6]. However, Hero’s recent product launches, such as the HF Deluxe Pro and Xtreme 250, are targeting both entry-level and premium segments, mitigating reliance on any single category.

The stock market has already begun to reflect optimism. Following the GST Council’s tax cuts on automobiles in August 2025, Hero’s shares surged 15% in two weeks, outperforming broader auto sector gains [3]. Despite a 35% correction from its peak earlier in 2025, the stock’s fundamentals remain strong, with a P/E ratio of 18.5x (as of September 2025) compared to Bajaj Auto’s 22x and TVS Motor’s 20x [7].

Risks and Mitigation

Challenges persist, including EV margins, which currently lag behind traditional segments. However, Hero’s localization and scale advantages—such as its partnership with Ather Energy for 1,900+ charging points—position it to reduce costs and enhance customer retention [3]. Additionally, Kasbekar’s operational expertise ensures a measured approach to scaling EV infrastructure without compromising profitability.

Investment Case

For long-term investors, Hero MotoCorp’s leadership transition represents a strategic inflection point. The company’s disciplined succession planning, combined with its aggressive EV investments and operational efficiency, creates a robust framework for sustained growth. With the global two-wheeler EV market expanding rapidly and Hero’s market share trajectory upward, the stock offers an attractive entry point. Immediate catalysts include the rollout of new EV models, GST-driven demand, and potential collaborations in battery-swapping technology.

Source:
[1] Hero MotoCorp Ltd Directors Report [https://www.indiainfoline.com/company/hero-motocorp-ltd/reports/directors-report]
[2] Connected Motorcycle Market Size, Share, Industry Trends [https://www.marketsandmarkets.com/Market-Reports/connected-motorcycle-market-16392581.html]
[3] India Electric Two-Wheeler Market Share: Top Players [https://diyguru.org/guide/india-electric-two-wheeler-market-share-top-players-new-entrants-competitive-trends/]
[4] HERO MOTOCORP LIMITED (HEROMOTOCO.NS) Q1 25/26 [https://finance.yahoo.com/quote/HEROMOTOCO.NS/earnings/HEROMOTOCO.NS-Q1-2026-earnings_call-346248.html/]
[5] Bajaj Auto Q1 Results: Cons profit jumps 14% YoY [https://m.economictimes.com/markets/stocks/earnings/bajaj-auto-q1-results-cons-profit-jumps-14-yoy-to-rs-2210-crore-revenue-rises-10/articleshow/123135916.cms]
[6] Honda scooter market share drops to 39%, TVS' up at 29% [https://www.autocarpro.in/analysis-sales/honda-scooter-market-share-drops-to-39-tvs-rises-to-29-in-q1-fy2026-127569]
[7] Hero MotoCorp News [https://economictimes.indiatimes.com/hero-motocorp-ltd/stocksupdate/companyid-13636.cms]