Hero, TVS and Bajaj outshine carmakers with record profit growth amid West Asia blues

New Delhi: Motorcycle makers are opening up a clear lead over passenger vehicle manufacturers this earnings season, helped by strong export demand and resilient domestic sales that have cushioned the impact of rising input costs.

Two-wheeler companies have delivered far stronger earnings than carmakers. TVS Motor reported a 47% rise in September-quarter profit, while Hero MotoCorp posted a 41% increase, joining Bajaj Auto in reporting robust growth despite higher commodity prices linked to tensions in West Asia.

The contrast with the passenger vehicle segment has been stark. Maruti Suzuki and Hyundai Motor India both reported profit declines amid slowing demand and margin pressure.

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Strong export demand, resilient domestic sales and healthy scooter sales supported two-wheeler makers. Timely price increases also helped offset higher commodity costs, while carmakers faced profit pressure from rising costs and slower demand.

Hero MotoCorp’s profit rose 41% to ₹1,861 crore in the July–September quarter. TVS Motor’s profit increased 47% to ₹1,219 crore.

TVS Motor raised prices to help counter rising commodity costs, while stronger exports supported its earnings. Its Ebitda margin increased by 30 basis points to 13% during the quarter.

Higher input costs squeezed profitability at both carmakers. Maruti Suzuki also faced higher logistics costs, while Hyundai said raw-material inflation had a significant impact on its profit.

Exports were a key support for Hero, TVS and Bajaj, with demand rising in markets including Latin America, Africa and Southeast Asia. TVS also cited higher sales in international markets as a contributor to its profit growth.

Industry executives attributed the stronger performance of motorcycle makers to healthy overseas demand, robust scooter sales and timely price hikes that helped protect profitability. TVS also said it plans to spin off its financing arm, signalling a bigger role for vehicle finance in fueling future growth.

New Delhi-based Hero Motocorp on Wednesday reported a 41% surge in profit to ₹1,861 crore in the July to September quarter while its revenue grew by 23% to ₹14,971 crore. The company saw a 10% increase in two-wheeler sales to 1.87 million units. As per the firm, its earnings before interest, tax, depreciation and amortization margin also held steady at 13.4% even as raw material prices surged.

The Hosur-based TVS saw profit jump 47% to ₹1,219 crore in the July to September quarter, owing to higher sales in domestic and international markets, with revenue growing 39% to ₹19,474 crore.

Total two-wheeler and three-wheeler sales for the company grew from 1.5 million units to 1.9 million units in the July to September quarter, a growth of 27%. Two-wheeler sales grew 27% to 1.84 million units, while three-wheeler sales grew 47% to 78,000 units.

TVS banks on exports

The high profit growth for TVS came on the back of an increase in its earnings before interest, tax, depreciation and amortization (Ebitda) margin by 30 basis points to 13% during the quarter as exports rose while the company battled commodity cost rises via price hikes.

TVS shares on Wednesday closed with a 3.74% gain, against Nifty Auto's 1.45% gain. Hero, which released its results after market hours, closed Wednesday with almost 2% gains.

Hero MotoCorp highlighted its performance in the scooter segment, noting that domestic internal combustion engine (ICE) scooter dispatches grew by 35% year-on-year (y-o-y), resulting in a 1% y-o-y market share expansion to 7.3%. The scooters portfolio accounted for 13% of the overall volume mix in Q2, up from 10% in the same period last year.

“We delivered a strong performance this quarter, with scooters emerging as a key growth contributor, supported by healthy momentum across both ICE and VIDA electric portfolio,” Harshavardhan Chitale, chief executive officer at Hero MotoCorp, said in a statement late on Wednesday. The company will hold its earnings call on Thursday.

“Our 100cc motorcycle segment also continued to contribute to overall growth, underscoring the resilience of our portfolio. Going forward, our focus remains on sustaining this positive momentum, driving profitable growth and building a more diversified and future-ready business,” Chitale added.

CEO handover and Norton push

TVS has also guided for a positive outlook on demand in the months ahead.

“The outlook is still positive. There are some challenges because the base effect is going to play because of GST cuts in September last year,” K.N. Radhakrishnan, chief executive at TVS, said during a post-results earnings call on Wednesday.

“We are expecting that there will be growth and it will be a good single digit. Based on overall activity and GDP growth, we expect growth. You will see growth both in two-wheelers and three-wheelers,” Radhakrishnan added.

After a two-plus-decade stint with TVS Motor, Radhakrishnan is also set to step down as chief executive in January 2027, when TVS’ international business head, Peyman Kargar, takes over the role. Radhakrishnan will remain on the board as a non-executive director.

The company released its results a day after Bajaj Auto, which also reported robust profit growth driven by rising international sales. The Pune-based automaker on Tuesday reported net profit of ₹3,436 crore, while revenue rose 60% from a year earlier ₹25,125 crore. Growth was driven by international demand, while domestic two-wheeler sales remained subdued.

The results season is seeing two-wheeler firms post significantly better performance compared to four-wheeler companies, which are witnessing pressure on profitability. Maruti Suzuki reported a drop of 26% in profit to ₹2,466 crore, while Hyundai Motor India also recorded a 24% decline to ₹1,196 crore.

The better performance from Hero, TVS and Bajaj is coming on the back of their rising exports to markets such as Latin America, Africa and Southeast Asia. TVS is also stepping up Norton's expansion in Europe, with dealership expansion underway, while launches in the US and India remain pending.

“We are setting up a very strong network in many countries in Europe. The India launch is expected in the coming months. We have started many initiatives in India. You will see that very shortly. There are also further new models that are getting developed,” Radhakrishnan said.

The demerger of the finance business is also coming at a time when financing has become a key lever in the automobile market to unlock growth, while other lending segments are growing rapidly.

Key Takeaways

• Hero profit rose 41%, TVS 47%, driven by domestic and overseas sales.
• Carmakers Maruti Suzuki and Hyundai saw profits fall as two-wheelers pulled ahead.
• TVS approved spinning off its finance business into a separate listed company.
• TVS CEO Radhakrishnan will exit in January 2027, with Peyman Kargar taking over.
• TVS expects single-digit growth, but last year’s GST cuts make comparisons tougher.