Hero Fincorp Ltd. is the financial services arm of Hero MotoCorp Ltd., offering solutions like two-wheeler financing, SME lending, and personal loans. Established in 1992 as Hero Honda FinLease Limited, it was renamed after Hero MotoCorp acquired full ownership post Honda's exit from their joint venture.

The company has a vast presence with nearly 2000 retail outlets, 2000 corporate clients, and 1000 dealerships across 1900 cities, towns, and villages. It holds a “AA+ (Stable)” rating from CRISIL, ICRA, and CARE.

Timeline

1. 1991-2012: Incorporated as Hero Honda Finlease Ltd. | Renamed as Hero Fincorp Ltd.
2. 2013-19: Received equity infusion of INR 106 Cr. | Launched Two-Wheeler Financing business, Used Car Business | 3000 touchpoints in 1700+ locations
3. 2020: Achieved the status of India's No.1 Two-Wheeler Financier. | Among the Top 3 NBFCs in Pre-Owned Car Loans. | Secured a fund-raising agreement of INR 1,075 Cr. from PE Investors & Promoters.
4. 2021: Launched a Customer Service App. | Introduced 'SimplyCash', a digital Loan Product.
5. 2022: Launched Partnership Loans and achieved Disbursal of INR 1,900 Cr.+ in the first year.
6. 2023: Achieved the highest-ever Disbursals  in FY23 | Launched EV Financing |  Crossed 10 Mn. Customers | Recognized as 'Great Place to Work' for the 6th year in a row.
7. 2024: Achieved ₹53,642 Cr AUM & ₹34,463 Cr disbursals; new brand identity; 11 Mn lives touched.

Product Portfolio

The Company provides a wide portfolio of financial products including:

Subsidiary: Hero Housing Finance Ltd.

1. Hero Housing Finance Limited (HHFL) is a wholly owned subsidiary of HFCL subsidiary of Hero Fincorp Ltd.
2. HHFL commenced its lending operations from April, 2018. 
3. Products: Housing loans, loan against property and construction loans.

Hero FinCorp Limited 

Key Consolidated Financials (in ₹ Cr)

Strategic Insights & Business Analysis

Hero FinCorp is executing a strategic pivot toward a safer, technology-driven lending model. Backed by the strong brand equity of the Hero Group, the company is embedding artificial intelligence (AI) across its operations to automate loan approvals, improve credit selection, and optimize loan collections across urban and rural India.

Key Takeaways

Accounting Rule Impact vs. Core Profits: The reported net loss of ₹226.01 Cr in FY26 is primarily due to an Ind AS accounting rule requiring Compulsorily Convertible Preference Shares (CCPS) to be treated as liabilities and marked to market through the P&L statement. On an adjusted operational basis, treating CCPS as equity per the Companies Act, the business generated a positive net profit.

Pivot to Secured, Low-Risk Assets: HFCL intentionally reduced its exposure to high-risk, unsecured digital consumer loans. Instead, it channelled capital into lower-risk, secured products like two-wheeler financing, used car loans, and housing finance through its subsidiary, Hero Housing Finance Ltd (HHFL).

Significant Asset Quality Cleanup: AI-driven credit checks and smarter collection engines have supported asset quality improvement. Gross NPA declined from 5.41% in September 2025 to 3.48% in September 2026, while Net NPA fell from 2.41% to 1.46%. However, loan write-offs and the sale of previously written-off loans also contributed to the improvement.

Strong Subsidiary Performance: Hero Housing Finance (HHFL) delivered a standout performance in FY26, with Profit After Tax (PAT) surging 57.5% YoY to ₹80.49 Cr.

Lower Borrowing Costs & Capital Position: Average borrowing costs declined from 8.6% in FY25 to 8.2% in FY26. The Capital Adequacy Ratio (CAR) was 16.80% in FY26, while the latest reported ratio declined to 16.3% in September 2026. It remains above the 15% regulatory minimum cited in the Q2 FY27 analysis, although the narrowing capital buffer warrants monitoring.

Q2 FY27 Financial Performance

Quarter ended September 2026 | Standalone results | ₹ Cr

H1 FY27 Performance: Hero FinCorp reported an approximate cumulative profit of ₹158 Cr for the six months ended September 2026, compared with a loss of around ₹163 Cr in H1 FY26.

Net Interest Income (NII): NII stood at approximately ₹1,050 Cr in Q2 FY27, compared with ₹1,032 Cr in Q2 FY26, representing growth of around 1.7%. However, NII declined approximately 3.6% sequentially from the previous quarter, indicating that underlying income growth remains modest.

Key Developments & Highlights

1. Strong Profitability Turnaround: The company moved from a loss of ₹112.82 Cr in Q2 FY26 to a profit of ₹149.53 Cr in Q2 FY27. Profitability also improved from ₹8.4 Cr in Q1 FY27.

2. Lower Credit Provisions: Provisions for bad loans declined from ₹645 Cr in Q2 FY26 to ₹436 Cr in Q2 FY27. Provisions as a proportion of NII fell from approximately 62% to 42%, providing a significant boost to reported profits.

3. Loan Book Expansion: On-book loans increased from ₹47,690 Cr in March 2026 to ₹49,954 Cr in September 2026, representing growth of approximately 4.7% over six months.

4. Lower Preference-Share Revaluation Impact: The non-cash revaluation charge associated with convertible preference shares declined from approximately ₹144 Cr in Q2 FY26 to ₹8 Cr in Q2 FY27. This materially supported the profit turnaround, although it is an accounting impact rather than recurring operating income.

5. IPO Status: Hero FinCorp filed its IPO papers with SEBI in July 2024, but the approval subsequently lapsed. The company may reconsider a listing when market conditions are suitable; no confirmed new IPO timeline has been reported.

Key Takeaways – Q2 FY27

Hero FinCorp has delivered a meaningful recovery after its FY26 loss, supported by lower credit provisions, improving asset quality and a smaller preference-share revaluation charge. Its loan book is expanding gradually, but NII growth remains modest and declined sequentially.

Going forward, monitor sustained core earnings growth, credit costs, leverage and capital adequacy. The durability of the turnaround will depend on whether profitability continues to improve alongside stronger underlying income rather than relying primarily on lower provisions and accounting adjustments.

Hero Fincorp Annual Report 2025-2026
Hero Fincorp Financials 2024-2025

Hero Fincorp Annual Report 2023-2024

Hero Fincorp Annual Report 2022-2023

Hero Fincorp Company Deck