Polaris is riding high

Polaris CEO Scott Wine knows about steady steering on a rough road. A veteran of Danaher (DHR) (a design and manufacturing firm) and United Technologies (UTX), Wine took over the Minnesota-based snowmobile, motorcycle, and off-road-vehicle maker on Sept. 1, 2008, two weeks before the collapse of Lehman Brothers triggered the financial crisis. The recession put a crimp in discretionary purchases, and Polaris saw sales slip 20% in 2009 to $1.57 billion, the lowest revenue total for the company since 2002. Since then Polaris has doubled sales, and profits increased 135% after the company made $925 million on sales of $3.2 billion in 2012. Its stock price has pushed past $125, up 290% over the past three years. Polaris became the top North American seller of ATVs in 2012, and sales of off-road vehicles accounted for 69% of the company’s revenue. Wine attributes Polaris’s growth during the tepid economic recovery to a focus on research and development. Since 2009, Polaris has doubled its R&D budget from $63 million to $127 million. “Nobody’s safe in this space, but they’ve done a good job putting enough money into making really good products,” says Jaime Katz, an equity analyst at Morningstar. Now the company is looking to motorcycles to help sustain its growth. Last year sales of on-road vehicles were $240 million, a 64% increase over 2011 mostly driven by Victory motorcycles, a brand launched in 1998. Polaris is still a minor player in the heavyweight motorcycle segment, with 5% market share compared with Harley Davidson’s (HOG) 80%. This summer, Polaris relaunched Indian motorcycles after spending $100 million to acquire and redevelop the historic brand. Wine aims to turn a profit on Indian by the end of next year.

This story is from the October 28, 2013 issue of Fortune.