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Margins intact despite weak demand

• HMCL’s net revenue declined 5.6% YoY to INR95.8b (est. INR 96.6b).
• Net realization grew 6% YoY/dipped 2.7% QoQ to INR70k (in line with estimates). Volumes slid 11% YoY and 1% QoQ. ? Gross margin expanded 100bp YoY (-120bp QoQ) to 33.3% (est. 33%), owing to lower commodity costs and a favorable mix.
• This resulted in a better-than-estimated EBITDA margin at 14.4% (flat YoY/+20bp QoQ, est. 13.8%).
• EBITDA declined ~6% YoY to INR13.8b (est. INR13.3b).
• Further, higher other income boosted PAT to INR11.2b, largely flat YoY (+4.1% QoQ, ahead of est. INR10.5b).

From the Press Release

• HMCL reported wholesale volumes of 1.37m units in 1QFY26, aided by healthy retail demand and steady VAHAN registrations during the quarter.
• Margins were aided by strong demand in the entry and deluxe motorcycle segments and 125cc scooters.
• The EV segment under the VIDA brand continued to gain traction. VIDA launched the EVOOTER VX2 and rolled out a Battery-as-a-Service (BaaS) subscription model in July 2025, following a high-visibility IPL campaign promoting removable battery tech.
• Global business outpaced industry trends, led by new launches (Xoom 110, Hunk 160R 4V, Xtreme 125R, and HF Deluxe) in Sri Lanka in collaboration with Abans Auto, reflecting strong brand pull internationally.
• Valuation: The stock trades at 19.3x/17.6x FY26E/FY27E EPS.

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