Hero MotoCorp's Q4 margin edges up as lower tax rate lifts profit
Revenue growth outpaced costs, but net profit growth also benefited from a lower tax rate and a meaningful contribution from other income.
Filed 05 May 2026, 20:52 IST · after market close · Hero MotoCorp Ltd (HEROMOTOCO)
Key takeaways
- Consolidated revenue grew +30.18% YoY in Q4FY26, while operating margin expanded 0.36 percentage points as expenses grew +29.63%.
- Net profit rose +26.11% YoY, helped by a 5.4 percentage-point fall in the tax rate, while other income contributed 8.57% of pre-tax profit.
- The stock gained +1.19% in the first session after the after-close filing, versus a 2.80% median absolute move across its last eight results reactions.
Price around the results
Revenue growth outpaced costs in Q4FY26
Consolidated revenue grew +30.18% YoY, slightly faster than the +29.63% rise in expenses, allowing operating profit to grow +33.40% and operating margin to expand 0.36 percentage points. Sequentially, revenue rose +3.94% while expenses increased +3.91%, leaving operating margin broadly unchanged with a 0.02 percentage-point improvement.
Lower tax rate lifted profit beyond operating growth
Net profit grew +26.11% YoY, ahead of the +17.61% increase in pre-tax profit, as the tax rate fell 5.4 percentage points. Other income declined -54.30% YoY but still accounted for 8.57% of pre-tax profit, so reported earnings included a material non-operating contribution. Interest expense rose +10.57% YoY, adding a modest offset.
Margin stabilises below the Q2FY26 peak
Operating margin rose from 14.45% in Q4FY25 to 15.26% in Q2FY26, then fell to 14.79% in Q3FY26 before edging up to 14.81% in Q4FY26. The quarter's margin matched the 14.81% median for the 93 Consumer Discretionary peers that had reported the same quarter.
Initial market rise was within Hero's usual range
As the results were filed after market close, the stock's first-session response was a +1.19% rise after a +2.56% opening gap. The move was smaller than the stock's 2.80% median absolute reaction across its last eight results, although the gain reached +4.58% by the next session before turning -2.23% after five sessions.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹12,978 cr | ₹12,487 cr | +3.94% | +30.18% |
| Other income | ₹158 cr | ₹84 cr | +87.38% | -54.30% |
| Expenses | ₹11,056 cr | ₹10,641 cr | +3.91% | +29.63% |
| Operating profit | ₹1,922 cr | ₹1,846 cr | +4.10% | +33.40% |
| Operating margin (%) | 14.81% | 14.79% | — | — |
| Interest | ₹19 cr | ₹20 cr | -4.68% | +10.57% |
| Depreciation | ₹221 cr | ₹219 cr | +0.86% | +8.01% |
| Profit before tax | ₹1,841 cr | ₹1,692 cr | +8.77% | +17.61% |
| Tax | ₹367 cr | ₹417 cr | -12.09% | -7.46% |
| Net profit | ₹1,474 cr | ₹1,275 cr | +15.59% | +26.11% |
| EPS (₹) | ₹72.98 | ₹63.36 | +15.18% | +25.65% |
Operating margin of 14.81% compares with a Consumer Discretionary sector median of 14.81% across 93 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +1.19% | -0.05% |
| Next session | +4.58% | — |
| 5 sessions | -2.23% | +0.35% |
| 15 sessions | -0.67% | — |
| 30 sessions | -1.71% | — |
Volume on the results session was 4.64× its 20-day average.
What to watch
- Whether operating margin holds above 14.81% after the 0.02 percentage-point QoQ improvement.
- Whether the tax rate remains near or below 19.92%.
- Whether other income's contribution stays around 8.57% of pre-tax profit.