Hero Motors Shares Hit 5% Lower Circuit, but Stock Remains 42% Above Issue Price
- October 22, 2026
- Posted by: Harsh Piplani
- Category: News
Hero Motors shares hit the 5% lower circuit at Rs 116.58 on 22 Oct 2026, down Rs 6.13 from the previous close of Rs 122.71, a day after a 10% lower circuit on 21 Oct. At the day’s high of Rs 119.35 the stock was about 42% above the Rs 84 issue price, which matches the headline, and at Rs 116.58 it is about 39% above (my calculation). I found no company news that explains the fall.
Quick Answer
Hero Motors shares hit the 5% lower circuit at Rs 116.58 after a 10% fall on 21 Oct, and the stock is now about 35% below its record high of Rs 178.84 by my calculation. The stock is still about 39% above the Rs 84 issue price, but it trades near 128 times trailing earnings against an industry multiple of about 37 times. No company announcement explains the fall, and reports point to profit-taking, the cyclical auto sector and a weak market. Newly listed stocks can swing sharply, so size any decision to your own risk.
Hero Motors shares have now fallen two sessions in a row to the lower circuit, giving back a large part of the gains made after the September listing. The stock opened at Rs 118.70 on Thursday, touched a high of Rs 119.35 and then locked at Rs 116.58, with about 2 crore shares traded.
This article on Hero Motors shares covers the price action, the issue and listing details, the financials, the valuation and the risks, and it asks whether the stock is still worth holding. It is educational and not a recommendation. Hero Motors is a separate company from Hero MotoCorp, so do not mix up the two.
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Hero Motors Shares Today: Lower Circuit Details
| Hero Motors shares: point | Level |
|---|---|
| Previous close (21 Oct) | Rs 122.71, after a 10% fall |
| Open on 22 Oct | Rs 118.70 |
| Day high | Rs 119.35 |
| Day low and last price | Rs 116.58, the 5% lower circuit |
| Change | Down Rs 6.13 or 5.00% |
| Volume by 1:19 PM | About 2.03 crore shares |
| Record high | Rs 178.84 on 5 Oct 2026 |
| Fall from the record high | About 35% (my calculation) |
A 5% circuit means the exchange has tightened the daily limit on the stock from 10%, which is a common step for volatile newly listed shares (my reading). The previous close of Rs 122.71 was itself a 10% lower circuit, so the stock has lost about 14% in two sessions from about Rs 136 (my calculation). On the BSE the shares were at Rs 116.60, also down about 5%, so both exchanges show the same pattern.
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Hero Motors Shares and the Issue Price
| Hero Motors shares: issue detail | Figure |
|---|---|
| Issue price | Rs 84 per share |
| Issue size | Rs 1,000 crore, subscribed 6.66 times |
| Bidding dates | 16 Sep to 18 Sep 2026 |
| Listing date | 23 Sep 2026, opening at Rs 82, a 2.38% discount to the issue price |
| Lot size | 178 shares, Rs 14,952 at the issue price |
| Price at Rs 116.58 versus issue price | Up about 38.8% (my calculation) |
| Price at the Rs 119.35 high versus issue price | Up about 42.1% (my calculation) |
The headline’s 42% above the issue price was measured at the day’s high of Rs 119.35, and at the lower circuit the gain is about 39%. The stock opened at a listing price of Rs 82, below the issue price, and then rose as high as Rs 178.84, which is about 113% above Rs 84 (my calculation), before the recent fall. Hero Motors shares are therefore still ahead of the issue price, but anyone who bought near the Rs 160 to Rs 170 level in early October is sitting on a loss.
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Risk: A stock that has already fallen 35% from its peak can fall further if early buyers keep booking profits or cutting losses.
What Is Behind the Hero Motors Shares Fall?
I found no company announcement, results or rating change on 21 or 22 Oct. One market report says the stock is under pressure despite its expansion in powertrains and points to the cyclical nature of the auto industry, while noting a positive outlook from Crisil Ratings. The same report links the fall to a sharp sell-off in auto-related small stocks, with SML Mahindra and Wheels India also hitting 10% lower circuits on 21 Oct. My reading is that profit-taking after a very fast rise and weak market sentiment explain most of the move.
| Hero Motors shares: possible cause (my reading) | Why it may matter |
|---|---|
| Profit-taking | The stock nearly doubled from the issue price within two weeks of listing |
| Valuation | About 128 times trailing earnings leaves little room for disappointment |
| Sector sell-off | Other auto component stocks also hit lower circuits on 21 Oct |
| Weak market | The Sensex was down about 0.7% on both days |
Hero Motors Shares: Business and Financials
| Hero Motors shares: financial point | Figure |
|---|---|
| Business | Powertrains for two-wheelers, e-bikes, performance cars and heavy vehicles |
| EV-linked products | 23% of FY26 revenue, up from 12% in FY24 |
| FY26 total income | Rs 1,216.74 crore, up about 9% |
| FY26 profit after tax | Rs 41.17 crore |
| Q1 FY27 revenue | Rs 319 crore against Rs 256 crore a year earlier, up about 25% (my calculation) |
| Q1 FY27 profit | Rs 10.20 crore against Rs 4.73 crore, more than double |
| Borrowings and net worth | Rs 400.79 crore and Rs 482.45 crore |
| Subsidiary | 51% of Hewland Engineering, with plans to buy another 39% for up to 0.60 million pounds |
Profit growth is strong from a small base, but profit of Rs 41.17 crore on income of Rs 1,216.74 crore is a margin of about 3.4% (my calculation), which is thin for a stock priced at over 100 times earnings. The company also carries borrowings of Rs 400.79 crore against a net worth of Rs 482.45 crore. Growth in electric vehicle products and the Hewland stake are the main growth levers for Hero Motors shares, and any sign that these are slowing would hit Hero Motors shares hard.
Hero Motors Shares Valuation
| Hero Motors shares: valuation measure | Figure |
|---|---|
| Market capitalisation at Rs 122.71 | About Rs 5,573 crore |
| Market capitalisation at Rs 116.58 | About Rs 5,295 crore (my calculation) |
| Trailing EPS | Rs 0.91 |
| P/E at Rs 116.58 | About 128 times (my calculation) |
| Industry P/E | 36.88 times |
| Book value per share | Rs 24.20 |
| Price to book at Rs 116.58 | About 4.8 times (my calculation) |
| Return on equity and debt to equity | 9.18% and 0.99 |
The issue was priced at about 92 times post-issue earnings, so the valuation was always high. At 128 times earnings the stock is more than three times the industry multiple, and a return on equity of 9.18% does not support that without very fast profit growth. The EPS of Rs 0.91 is small, so a small change in profit moves the multiple a lot.
Risk: A P/E more than three times the industry average means Hero Motors shares depend on very strong growth, and any miss can bring a large de-rating.
Hero Motors Shares: Hold, Avoid or Wait?
| Hero Motors shares: investor type (my reading) | Points to weigh |
|---|---|
| Allottee near the issue price | Still about 39% ahead; decide whether to book part of the gain given the valuation |
| Buyer near Rs 160 to Rs 170 | A loss of about 30%; the decision depends on belief in the growth story and not on price alone |
| New buyer | Valuation and volatility argue for waiting until the stock stabilises and Q2 results are out |
This is an educational view and not advice. The strengths of Hero Motors shares are growth in electric vehicle products, a Crisil positive outlook and profit that has more than doubled in Q1 FY27. The weaknesses are the valuation, a thin margin and the speed of the fall.
What to Watch Next on Hero Motors Shares
- Whether Hero Motors shares open higher or lower after the 5% lower circuit
- Whether the exchange widens or tightens the price band again
- Q2 FY27 results and whether profit growth continues from the Rs 10.20 crore in Q1
- Progress on the extra stake in Hewland Engineering
- Volume at lower levels, which shows whether buyers are returning to Hero Motors shares
Conclusion
Hero Motors shares hit the 5% lower circuit at Rs 116.58 after a 10% fall the day before, and the stock is still about 39% above the Rs 84 issue price but about 35% below its record high. The valuation near 128 times earnings leaves little cushion, and no company news explains the fall. Read the filings and decide on your own horizon.
Disclaimer: Data and figures in this article are sourced from publicly available information. These may or may not be accurate. Please verify all data with the official NSE (nseindia.com) and BSE (bseindia.com) websites before making any investment decision. Investments in securities are subject to market risk. This content is for educational purposes only and is not investment advice by Univest (SEBI RA INH000013776).
Frequently Asked Questions
Why did Hero Motors shares hit the lower circuit?
Ans. No company announcement explains it. A market report points to pressure despite the powertrain expansion, the cyclical auto sector and a sell-off in auto stocks. My reading is that profit-taking after a fast rise also played a part.
Are Hero Motors shares still above the issue price?
Ans. Yes. The issue price was Rs 84, so Rs 116.58 is about 38.8% above it by my calculation. The headline’s 42% was measured at the day’s high of Rs 119.35.
What is the record high of Hero Motors shares?
Ans. The record high was Rs 178.84 on 5 Oct 2026. At Rs 116.58 the stock is about 35% below it, by my calculation.
Are Hero Motors shares expensive?
Ans. At Rs 116.58 the P/E is about 128 times by my calculation against an industry P/E of 36.88, and the price to book is about 4.8. Return on equity is only 9.18%.
What does Hero Motors make?
Ans. It makes powertrains for two-wheelers, e-bikes, performance cars and heavy vehicles. Electric vehicle products were 23% of FY26 revenue, and it owns 51% of Hewland Engineering.
How did Hero Motors perform in Q1 FY27?
Ans. Consolidated profit was Rs 10.20 crore against Rs 4.73 crore a year earlier, and revenue was Rs 319 crore against Rs 256 crore. FY26 profit after tax was Rs 41.17 crore.
What are the risks of owning Hero Motors shares?
Ans. Risks include a very high P/E, a thin margin, borrowings of Rs 400.79 crore, the cyclical auto sector and high volatility after listing. A 5% circuit also limits how fast you can exit.
Is this article investment advice?
Ans. No. It is educational and not a recommendation to buy or sell. Please check the figures against company filings and your own risk profile before you act on anything you read here.
