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  • Dec 30, 2023 - Hero MotoCorp vs TVS Motors: Which Two-Wheeler Stock is Better in 2024?

Hero MotoCorp vs TVS Motors: Which Two-Wheeler Stock is Better in 2024?

Dec 30, 2023

Hero MotoCorp vs TVS Motors: Which Two-Wheeler Stock is Better in 2024

In the year 2023, Nifty Auto jumped 47.81%, outperforming the Nifty 50 making it one of the top 5 sectors. Even the two-wheeler stocks posted strong growth on the bourses.

The year 2024 will likely be eventful for the two-wheeler segment with two leading electric two-wheeler companies to hit the primary market in 2024.

Ather Energy is planning for an IPO by Diwali 2024. Ola Electric is likely to launch its IPO in the first quarter of calendar year 2024.

Moreover, the upcoming union budget and general elections could decide the course of growth in the two-wheeler segment.

In this editorial, we compare Hero MotoCorp and TVS Motors. Which one will get the bigger pie?

Retail auto sales showed moderate to positive performance across segments during the 2023 festive season. Retail sales during Navratri were modest.

However, they picked up around Diwali season with passenger vehicle (PV) sales growing 6% year-on-year (YoY). This was due to new launches and attractive offers. The industry expects the volume growth of PVs to be about 6-9% in the financial year FY24.

Sales of commercial vehicles too witnessed growth of 15% YoY due to robust infrastructure activities. However, it was the two-wheeler segment that experienced better-than-expected sales growth of 21% YoY. This was primarily driven by strong rural demand.

The auto industry is optimistic about two-wheeler volume and expects it to remain positive with high single-digit growth in FY24. The export market too is likely to improve further gradually.

This makes the two-wheeler segment one of the worthy considerations of 2024. Within the industry, there are two companies to ride this growth opportunity - Hero MotoCorp and TVS Motors.

In this article, we will be comparing both these companies and find out which one is the best.

Business Overview

Hero MotoCorp

Hero MotoCorp, erstwhile popularly known as Hero Honda is one of India's first motorcycle manufacturers.

The company was incorporated in 1984 and introduced as a technological collaboration with Honda, Japan.

Before manufacturing motorcycles, Hero was selling cycles under the brand name, Hero Cycles. In 2011, Honda Group ended its joint venture and sold its 26% stake to the Munjals (Hero's promoters), thereby changing the name to Hero MotoCorp.

TVS Motors

TVS Motors is among the top two and three-wheeler manufacturers globally, having 4 state-of-the-art manufacturing facilities in Hosur, Mysuru, and Nalagarh in India and Karawang in Indonesia.

Its subsidiaries in the personal e-mobility space, Swiss E-Mobility Group (SEMG) and EGO Movement have a leading position in the e-bike market in Switzerland.

Particulars Hero MotoCorp TVS Motors
Market Cap (in Rs billion)* 813 957
Market Share in two-wheelers Segment 32.20% 16.20%
Data Source: Equitymaster, Statista | * As on December 26, 2023

Between the two, TVS Motors is the bigger company with a marketcap of Rs 957 billion (bn) as compared to Hero MotoCorp, which has a marketcap of Rs 813 bn.

However, as per Statista, Hero MotoCorp has the highest market share of 32.2% in the two-wheeler segment. TVS Motors market share stands at 16.2%.


If we look at the performance of both stocks over the last one year, then both the stocks have outperformed the Nifty 50.

Moreover, TVS Motors clearly outperformed Hero MotoCorp. In the last 1 year, Hero MotoCorp delivered returns of 54.8%, while TVS Motors returned 85.8%.


Gross Sales (in Rs m) 19-Mar 20-Mar 21-Mar 22-Mar 23-Mar 5-Year CAGR
Hero MotoCorp 339,722 285,761 314,440 300,811 348,143 0.49%
TVS Motors 201,600 188,493 194,208 243,553 319,740 9.66%

In terms of revenue, TVS Motors scores over Hero MotoCorp. The gross sales of Hero MotoCorp are flattish, while that of TVS Motors has clocked a CAGR of 9.66%.

Hero's bestselling bike is the Splendor, which is an entry-level bike and the highest-selling bike in India. According to the Times of India report, around 1.6 m two-wheeler units were sold in November 2023, of which 2,50,786 were Hero Splendor.

The maximum sales that Hero clocks are from selling Splendor, HF Deluxe, and Passion. All these are 100-125 CC bikes. However, with the evolving market and increased consumer spending people want to go beyond 100 to 125 CC bikes.

This is where other players like TVS Motors and Bajaj dominate the market. TVS Motors has done well with its Apache line-up. This is in direct competition with Bajaj's Pulsar line-up.

TVS Jupiter is in second place selling 72,859 units in November 2023, while Honda Activa still leads this space as it managed to sell around 196,055 units.

In fact, TVS Motors has its three products (TVS Jupiter, TVS Ntorq, and TVS iQube) in the top 10 selling scooters in November 2023. This shows the growing dominance of TVS Motors in the two-wheeler space.


EBITDA (in Rs m) 19-Mar 20-Mar 21-Mar 22-Mar 23-Mar 5-Year CAGR
Hero MotoCorp 55,788.10 46,101.90 45,604.40 38,976.40 45,384.40 -4.04%
TVS Motors 21,862.60 23,248.80 22,850.50 27,875.00 42,053.80 13.98%
PAT (in Rs m) 19-Mar 20-Mar 21-Mar 22-Mar 23-Mar 5-Year CAGR
Hero MotoCorp 34,663.50 36,594.10 29,360.50 23,290.50 27,999.00 -4.18%
TVS Motors 7,254.00 6,468.00 6,075.00 7,308.80 13,094.60 12.54%
Gross Profit Margin 19-Mar 20-Mar 21-Mar 22-Mar 23-Mar 5-Year CAGR
Hero MotoCorp 31.01% 33.03% 29.35% 28.77% 29.39% -1.07%
TVS Motors 30.78% 34.66% 33.45% 33.25% 34.81% 2.49%
EBITDA Margin 19-Mar 20-Mar 21-Mar 22-Mar 23-Mar 5-Year CAGR
Hero MotoCorp 16.42% 16.13% 14.50% 12.96% 13.04% -4.50%
TVS Motors 10.84% 12.33% 11.77% 11.45% 13.15% 3.94%
Data Source: Ace Equity

Even though Hero MotoCorp can clock higher earnings before interest, tax, depreciation, and amortisation (EBITDA) margins, they are witnessing contraction in the last 5 years. TVS Motors, on the flip side, has witnessed margin expansion in the same period.

As can be seen in the above table, TVS Motors hands down beat Hero MotoCorp in terms of profitability. In terms of EBITDA and profit after tax (PAT), TVS Motors delivered double-digit growth in 5 years.

In fact, TVS Motors' EBITDA has doubled in the last 5 years. Hero MotoCorp's profitability was impacted due to its muted sales in the past five years, while TVS Motors was able to record consistent revenue growth.

Debt Management

Debt-to-Equity Ratio (x) 19-Mar 20-Mar 21-Mar 22-Mar 23-Mar 5-Year CAGR
Hero MotoCorp 0.02 0.01 0.02 0.02 0.02 0.00%
TVS Motors 2.93 3.46 3.12 3.48 3.93 6.05%

In terms of financial efficiency, Hero MotoCorp overtakes TVS Motors. Hero MotoCorp is a net debt-free company, while TVS Motors carries higher debt. The debt of TVS Motors is around 3 times its equity.

Financial Efficiency

ROCE 19-Mar 20-Mar 21-Mar 22-Mar 23-Mar 5-Year CAGR
Hero MotoCorp 40.12% 33.21% 25.65% 19.47% 23.93% -9.82%
TVS Motors 15.82% 12.69% 11.21% 11.32% 14.11% -2.26%
ROE 19-Mar 20-Mar 21-Mar 22-Mar 23-Mar 5-Year CAGR
Hero MotoCorp 27.65% 26.61% 19.71% 14.92% 17.26% -8.99%
TVS Motors 24.81% 20.05% 17.09% 17.77% 26.44% 1.28%
Data Source: Ace Equity

The returns of capital employed (ROCE) of both companies have declined over the last 5 years. Hero MotoCorp, however, can maintain higher ROCE compared to TVS Motors.

The return on equity (ROE) of Hero MotoCorp has been declining for the past 5 years this is due to the impact of flattish sales on its profitability. However, TVS Motors was able to clock higher ROE in the same period due to better profitability.


Looking at the dividends helps investors understand what a company does with profits, whether it invests back into business or distributes to its shareholders.

Therefore, considering dividends is equally important along with profitability, operational efficiency, and financial efficiency. When it comes to dividends both companies pay dividends to their shareholders.

Dividend Per Share (Rs) 19-Mar 20-Mar 21-Mar 22-Mar 23-Mar 5-Year CAGR
Hero MotoCorp 87 90 105 95 100 -1.61%
TVS Motors 3.5 3.5 3.5 3.75 5 7.39%
Dividend Yield 19-Mar 20-Mar 21-Mar 22-Mar 23-Mar 5-Year CAGR
Hero MotoCorp 3.40% 5.65% 3.60% 4.14% 4.26% 4.61%
TVS Motors 0.74% 1.18% 0.60% 0.60% 0.46% -9.07%
Dividend Payout Ratio 19-Mar 20-Mar 21-Mar 22-Mar 23-Mar 5-Year CAGR
Hero MotoCorp 50.46% 49.41% 71.90% 81.92% 71.12% 7.10%
TVS Motors 23.60% 26.62% 27.98% 23.54% 17.88% -5.40%
Data Source: Ace Equity

In terms of dividend per share, TVS Motors recorded a CAGR of 7.39% over the period of 5 years, while Hero MotoCorp showed a degrowth of 1.61%.

However, when it comes to dividend yield and dividend payout, Hero MotoCorp races ahead of TVS Motors. In the last 5 years, Hero MotoCorp increased its dividend yield and payout ratio, while the reverse is the case with TVS Motors.


Understanding the valuations of the company helps us buy stocks at their right worth.

To understand the valuations of both companies we would be looking at running them through various valuation metrics such as price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, market capitalization-to-sales ratio, and enterprise value (EV) by EBITDA ratio.

Valuations Hero MotoCorp 5-Year Median TVS Motors 5-Year Median
P/E (x) 24.8 19.1 65.3 40.8
P/B (x) 4.69 3.6 15.1 8.1
Marketcap to Sales 2.38 1.7 2.71 1.4
EV/EBITDA (x) 15.3 11.7 21.8 16.8
Data Source: | Data as of 28th December 2023

In terms of valuations, both seem to be available at stretched valuations.

However, if we look at their valuations relative to each other, Hero MotoCorp is at a better valuation than TVS Motors.

Both the companies' valuation metrics are trading above their respective 5-year median. Having said that, if we compare both the companies' valuation metrics (P/E and P/B) with the industry, then Hero MotoCorp is available at reasonable valuations.

Which is Better?

Both companies have their own hits and misses. In terms of revenue and probability, TVS Motors outperforms Hero MotoCorp, while in terms of financial efficiency, dividends, and valuations Hero MotoCorp outscores TVS Motors.

In terms of sales volume, Hero MotoCorp is India's leading two-wheeler manufacturer enjoying a domestic motorcycle market share of nearly 32%. The company has eight manufacturing facilities, of which six are in India and one each in Colombia and Bangladesh.

According to Hero MotoCorp's concall, they have added several premium products to their portfolio by launching premium motorcycles like Harley-Davidson X440, iconic Karizma XMR, and Xtreme 200S 4V.

In the second quarter of FY 2024, the company witnessed good traction in the bookings of the Harley-Davidson X440, with the order book at approximately 25,000 units. Moreover, the company has also launched its first premium store recently and plans to scale-up to over 100 stores in the next 6 months.

On the EV front, Hero MotoCorp continues to expand the number of cities and dealers along with the charging infrastructure gearing towards a volume scale up over the next 4 to 6 quarters.

TVS Motors in the domestic two-wheeler market has outperformed the industry even in Dussehra. According to TVS Motors' concall, the company expects rural demand to pick up.

Also on the exports front, the worst seems yet to be over as recovery is likely to take some more time, given the adverse global macro.

The company targets to launch i-Qube (its electric scooter) in multiple export markets in the next 2-3 quarters.

Moreover, has lined up some new product launches like TVS Jupiter 125 with Smart Connect tech, TVS Apache RTR 310 in partnership with BMW, and TVS X which is developed on the Born Electric platform, and the company expects it to set new benchmarks in EV industry, both in India and globally.

BMW CE 02 EV-designed and developed in collaboration with TVS is expected to see a global launch between March to April 2024.

With all these developments both Hero MotoCorp and TVS Motors are turning things in their favour in 2024.

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Yash Vora

Yash Vora is a financial writer with the Microcap Millionaires team at Equitymaster. He has followed the stock markets right from his early college days. So, Yash has a keen eye for the big market movers. His clear and crisp writeups offer sharp insights on market moving stocks, fund flows, economic data and IPOs. When not looking at stocks, Yash loves a game of table tennis or chess.

Equitymaster requests your view! Post a comment on "Hero MotoCorp vs TVS Motors: Which Two-Wheeler Stock is Better in 2024?". Click here!

1 Responses to "Hero MotoCorp vs TVS Motors: Which Two-Wheeler Stock is Better in 2024?"

Anna Amarnath

Dec 31, 2023

Both companies may show out performance in coming days, because of electric riders are going vast, so both are historically organizations hence the successful rate will get super for both companies.

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Equitymaster requests your view! Post a comment on "Hero MotoCorp vs TVS Motors: Which Two-Wheeler Stock is Better in 2024?". Click here!