Highlights
- Hero MotoCorp has outlined capital expenditure of around ₹1,500 crore for FY27.
- Planned investments span commuter motorcycles, ICE scooters, EV scooters, premium motorcycles and parts.
- Parts, Accessories and Merchandise revenue increased 30% YoY to ₹1,689 crore in Q1 FY27.
- Hero's genuine-parts distribution network comprises more than 400 distributors.
- GPC 2.0 at Tirupati is targeted for commissioning by the end of 2027.
Hero MotoCorp Limited (NSE:HEROMOTOCO) is supporting its evolving product portfolio with investment in manufacturing capacity and its parts distribution infrastructure.
While vehicle sales remain at the centre of the business, the company's Q1 FY27 presentation also highlights another part of its strategy: building capacity across multiple two-wheeler categories while expanding the infrastructure supporting its Parts, Accessories and Merchandise business.
Hero has outlined around ₹1,500 crore of capital expenditure for FY27, providing a useful indication of where management is directing investment as the portfolio broadens.
₹1,500 crore capex spans multiple businesses
Hero MotoCorp's FY27 capital expenditure plan covers capacity initiatives across commuter motorcycles, internal combustion engine (ICE) scooters, electric vehicle scooters, premium motorcycles and parts.
Rather than concentrating expenditure on one emerging category, the plan spreads investment across established businesses and newer areas.
This is particularly relevant as Hero increases its participation in scooters and electric vehicles while maintaining its large commuter motorcycle operations. Investment in manufacturing capacity can provide room for future volumes, although utilisation will ultimately depend on demand across these categories.
Data Source: Company Filings; Analysis: Kalkine Group
Parts business records 30% revenue growth
Beyond vehicle manufacturing, Hero's Parts, Accessories and Merchandise business recorded higher revenue during Q1 FY27.
Revenue from the business increased from ₹1,296 crore in Q1 FY26 to ₹1,689 crore in Q1 FY27, representing 30% YoY growth.
The parts operation provides Hero with exposure to its existing vehicle base after the initial motorcycle or scooter sale. As vehicles require maintenance and replacement components over their operating lives, distribution availability becomes an important part of supporting this business.
Hero reported a network of more than 400 genuine-parts distributors, providing the company with a broad channel for supplying replacement products.
GPC 2.0 expands distribution infrastructure
Hero MotoCorp is also developing GPC 2.0 at Tirupati, which is targeted for commissioning by the end of 2027.
The facility forms part of the company's effort to develop its parts infrastructure as the installed vehicle base and product portfolio evolve.
For Hero, distribution capacity is relevant not only to current parts demand but also to supporting a wider range of motorcycles, scooters and electric vehicles over time. The addition of newer products increases the number of components and customer requirements that the distribution system may eventually need to accommodate.
Manufacturing investment follows product expansion
Hero's investment plans also correspond with capacity actions already underway in individual categories.
The company has doubled capacity for the Destini scooter and is expanding capacity for the Xoom portfolio. VIDA production capacity, meanwhile, is planned to double by December 2026.
These initiatives illustrate how the ₹1,500 crore FY27 programme connects with the company's broader product strategy.
However, capacity additions do not automatically translate into equivalent sales growth. Future utilisation, customer demand and competitive conditions will determine the financial contribution from the additional manufacturing infrastructure.
Balancing established and newer businesses
The investment programme comes as Hero's business mix becomes broader. Its commuter motorcycles continue to provide substantial scale, while scooters, VIDA and premium motorcycles offer additional areas for participation.
The parts business adds another dimension because it is linked to vehicles already operating in the market rather than depending exclusively on new vehicle sales.
This combination means Hero's infrastructure requirements extend beyond assembly capacity. Manufacturing, parts distribution and supporting networks all form part of the company's ability to manage a wider product portfolio.
Looking ahead
Execution of the FY27 investment programme will be an area to monitor over the coming quarters. Hero has identified where capital will be deployed, but the eventual returns will depend on capacity utilisation, product demand and the development of newer categories.
The Parts, Accessories and Merchandise business enters this investment phase after reporting 30% YoY revenue growth in Q1 FY27, while the planned Tirupati GPC 2.0 facility provides an additional infrastructure milestone beyond the current financial year.
Together, these initiatives indicate that Hero's expansion strategy extends beyond increasing vehicle production alone.
Conclusion
Hero MotoCorp's ₹1,500 crore FY27 capex programme provides a framework for capacity investment across commuter motorcycles, ICE and EV scooters, premium motorcycles and parts. At the same time, Parts, Accessories and Merchandise revenue reached ₹1,689 crore in Q1 FY27, up 30% YoY.
With GPC 2.0 targeted for commissioning by end-2027 and capacity initiatives underway across multiple vehicle categories, the focus now shifts toward execution and utilisation of the additional infrastructure.
FAQs
Q: What is Hero MotoCorp's planned capex for FY27?
A: Hero MotoCorp has outlined approximately ₹1,500 crore of capital expenditure for FY27.
Q: Where will Hero MotoCorp invest its FY27 capex?
A: The programme covers commuter motorcycles, ICE scooters, EV scooters, premium motorcycles and the parts business.
Q: How much revenue did the parts business generate in Q1 FY27?
A: Parts, Accessories and Merchandise revenue reached ₹1,689 crore, up 30% YoY from ₹1,296 crore.
Q: How large is Hero's genuine-parts distribution network?
A: Hero reported more than 400 genuine-parts distributors.
Q: When is GPC 2.0 expected to be commissioned?
A: Hero MotoCorp is targeting commissioning of GPC 2.0 at Tirupati by the end of 2027.