**Hero MotoCorp: Market Brief & Q3 Outlook** **Price Action & Sentiment** Hero MotoCorp shares are demonstrating resilience, currently trading in the **₹5,700–₹5,800** range. The stock has seen sustained interest, supported by a recovering two-wheeler sector and expectations of strong double-digit growth in quarterly earnings. Momentum remains positive with year-on-year returns exceeding **34%**. **Pricing Power & Realization** Pricing strategies and an improved product mix are providing critical incremental support. Market data indicates that discount levels remained flat sequentially, signalling a stable competitive environment. The company implemented a price hike of approximately **50 basis points** during the quarter to offset input costs. Consequently, Average Selling Prices (ASPs) are projected to rise by **2–2.5%** year-on-year. This growth is driven by a richer sales mix, specifically a higher contribution from exports and the scooter segment. **Strategic Drivers** * **EV Repricing:** A sharp **10%** price increase across the electric vehicle portfolio (Vida) initiated in early December is expected to further aid realizations, though volume sensitivity remains a watchpoint. * **Volume Growth:** Projections estimate robust volume growth in the **mid-teens (approx. 16%)** year-on-year, underpinned by festive demand and a gradual rural recovery. * **Margins:** Operational leverage from higher volumes is likely to keep EBITDA margins steady at around **15%**, balancing out marketing spends and commodity costs. **Sector Outlook** The broader two-wheeler industry is eyeing **6–9%** growth for FY26. While the domestic economy segment has seen some market share compression, the focus on the 125cc premium commuter space—marked by the upcoming Splendor 125cc launch—aims to recapture dominance. Exports continue to recover, providing a necessary hedge against domestic volatility.