The Indian automobile sector is a promising investment opportunity. As an investor, you should keenly watch two shares – Mahindra & Mahindra (M&M) and Hero MotoCorp. These two auto stocks have been on the radar as they represent two very different growth engines.
In this blog, we have compared these popular automobile stocks based on their core strengths, product lines, and future mobility prospects.
In this article, we will help you make an informed decision to invest for the long haul.
Comparing The Two Auto Stocks Under 5 Key Parameters
Let’s evaluate how each auto company stands in the market.
Business Mix
M&M’s business is built on balance. The company draws its revenue from automobiles and farm equipment. Thus, it gains exposure to both rural and urban economies.
Its dominance in SUVs led by Scorpio-N and XUV700 has helped it move up the value curve, while tractors offer steady cash flow even in tough cycles.
Hero MotoCorp, on the other hand, is an undisputed leader in motorcycles, which contributed nearly 93% of its volumes last year. This scale gives Hero a strong cost base. However, it lacks diversification like M&M, which implies that the Hero Motocorp share price largely depends on the two-wheeler market.
Demand Cycles
In terms of demand cycles, M&M enjoys an advantage. The demand for SUVs remains strong across multiple cycles. For top models, the waiting period sometimes stretches for months. On the other hand, this urban momentum offsets the dependence on tractors, where the revenue primarily pours in during the monsoon season.
In contrast, Hero’s growth rides on rural recovery and consumer sentiment. After a few slow years, demand is picking up again, supported by festive buying and the demand for replacement.
Still, the pace at which Hero is recovering depends on fuel prices and rural cash flow. M&M’s diversified exposure gives it resilience. When one segment slows, the other tends to hold steady, keeping overall growth smoother through business cycles.
Product Pipeline & Launch
In recent years, the product strategy of M&M has revolved around technology, where it launched premium vehicles. Over the last two years, the brand has launched multiple SUVs, which have increased its average selling price. The Born Electric lineup, expected to hit the road in 2026, will get a dedicated EV architecture. This is further likely to drive the M&M share price higher.
Meanwhile, Hero is broadening its portfolio beyond commuter bikes. The Xtreme and XPulse series cater to aspirational riders, while the Vida electric scooter is the first step of the brand into EVs. However, Hero has been traditionally slower than its peers when it comes to new launches. This automaker is more practical and cost-conscious in innovation.
EV & Future Mobility Strategy
M&M is making significant strides to produce EVs. It plans to invest ₹8,000 crore by 2027 to develop a new EV platform and expand its electric SUV lineup. By 2030, EVs are likely to constitute 20% to 30% of the company’s portfolio.
However, Hero is more conservative with its approach to producing EVs. The Vida brand has been launched in a few major cities, and Hero also owns a stake in Ather Energy. The brand, therefore, keeps its options open in the two-wheeler EV space that has been evolving fast. It’s more cautious in testing the readiness of the ecosystem before scaling aggressively.
Conclusion
M&M has a diversified growth strategy. Its innovation with SUVs, strong cash flow through tractors, and bold EV bets make it a promising pick. On the other hand, Hero MotoCorp offers consistency. It produces mass volumes, has a deep rural reach, and has consistent performance over the years.
Based on your preferences and goals, you can make a decision.
