Hyundai Motor India Ltd (HYUNDAI) Q2FY27 Concall Transcript - Sep-2026 Qtr
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Moderator: Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY27 earnings conference call of Hyundai Motor India Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing "*" then "0" on your touch-tone phone. I now hand the conference over to Mr. Vivek Kumar from ICICI Securities. Thank you, and over to you.
Vivek Kumar (ICICI Securities): Thank you. Good evening, everyone. And welcome to the Q2 and H1 FY '27 earnings conference call of Hyundai Motor India Limited. From the management team today, we have with us, Mr. Tarun Garg, Managing Director and Chief Executive Officer; Mr. Wangroo Hur, Chief Financial Officer; Mr. D. H. Park, Chief Operating Officer; Mr. Mukundan M. S., Chief Manufacturing Officer; Mr. Saravanan T., Function Head, Finance; and Mr. K. S. Hariharan, Head of Investor Relations, from Hyundai Motor India Limited. I would like to inform you that the call is being recorded. I would now like to invite Mr. K. S. Hariharan from Hyundai Motor India Limited. Over to you, sir.
K. S. Hariharan (Hyundai Motor India Ltd): Thank you, Vivek. Good evening, everyone. Welcome to the earnings call for the second quarter and half year of fiscal year 26-27. Before we begin, I want to remind you of the safe harbor. We may be making some forward-looking statements that have to be understood in conjunction with the uncertainties and the risks that the company faces. The conference call will begin with our MD & CEO remarks on the performance and outlook, followed by a brief presentation by me on our Q2 numbers, after which we'll be happy to receive your questions. Now, I'm handing over to our MD & CEO, Mr. Tarun Garg. Over to you, sir.
Tarun Garg (Hyundai Motor India Ltd): Thank you, Hari. Good afternoon, everyone, and thank you for joining us today. So fiscal 27 represents an important chapter in HMIL's journey, marked by several notable milestones. 30 years of successful operations in India, 4 million cumulative exports, and 100,000 vehicle production at Pune ramp-up within a short time.
Tarun Garg (Hyundai Motor India Ltd): with the strong commitment by HMG towards India. As emphasized by our Executive Chair at the Pune plant inauguration, India will remain a key focus market for the group, for investments in advanced manufacturing, innovation, R&D and localization. This coupled with our 30 years of strong legacy will make the next 30 years epic for Hyundai in India. Moving on to quarterly business performance, I'd like to highlight that following the production disruption last quarter, we restored operations back to normalcy within just 22 days, reflecting our operational agility and resilience. We registered our highest ever quarterly total sales in the quarter gone by, reflecting a strong momentum in sales, even before our new model cycle kicked in with Bayon launch two days back. Our domestic quarter two fiscal '27 volumes grew by 19% both quarter-on-quarter and year-on-year, supported by robust customer demand and our strategic on-ground actions. The quarter also witnessed few notable highlights, highest ever rural contribution of 26.6%, highest ever CNG sales with contribution reaching 19.1%, and highest ever Vahan registration for fleet sales. As you know, launch of Bayon marks the onset of our golden product cycle. I'm happy to share that the response for this product has been extremely encouraging, with strong appreciation for its futuristic design, advanced AI-enabled features and attractive value proposition. Moving on to electrification, during the quarter, we witnessed encouraging traction for Creta Electric, which helped double our EV contribution on sequential basis. Building on this momentum, we are fully geared up for the launch of our dedicated mass market EV in quarter four of fiscal '27. Parallelly, we will continue to strengthen the overall EV ecosystem, supported by localization, charging infrastructure, and other customer-centric initiatives. Our aim is to bring our EV penetration closer to industry levels by next fiscal year. We strongly believe, Bayon and the upcoming EV will further strengthen our leadership in SUVs and contribute meaningfully to our growth. Backed by festive demand, incremental capacity from the third shift operations at Pune, and of course, two new products, we are firmly on track to achieve full year growth guidance of 8% to 10% in domestic sales while also being confident about outpacing the industry in H2 of fiscal '27. On CAFE 3, we welcome the government's progressive framework. We have already committed to increasing the share of eco-friendly powertrains in our portfolio to 50% plus over the next 4 to 5 years. We remain well positioned to comply with CAFE 3 norms while continuing to offer customers a wide range of mobility solutions. Moving on to exports, despite ongoing geopolitical challenges, we witnessed a growth of 4% on year-on-year basis and strong sequential growth of 38% on quarter-on-quarter basis in exports. This growth was witnessed across markets, reflecting healthy underlying demand. On quarter-on-quarter, Middle East grew by 57%, Africa by 35%, Mexico by 56% and LatAm by 10%. Looking ahead, the worsening geopolitical situation has impacted our original plans to some extent. However, we are making every effort to minimize the impact. We aim to deliver double-digit growth in exports on year-on-year basis, supported by our strong products and operational flexibility. Coming to financial performance, we delivered our highest ever quarterly revenue, crossing ₹20,000 crore milestone. Revenue recorded growth of 19% on year-on-year and 27% on Q-on-Q basis. However, significant commodity headwinds weighed on the quarter's margins. While EBITDA margin declined on year-on-year basis, margin improved sequentially, supported by operating leverage, healthy mix, and our cost saving efforts. Looking ahead, cost headwinds continue to pose challenges to profitability. However, improved business outlook coupled with prudent pricing and cost control measures provide us confidence for healthy margin trajectory in H2. Our endeavor is to take appropriate measures to achieve our EBITDA margin guidance that we have given to you for the full year. Lastly, I extend my festive greetings and best wishes to everyone. Thank you for your continued trust and support. I now hand over back to Hari.
K. S. Hariharan (Hyundai Motor India Ltd): Thank you, sir.
K. S. Hariharan (Hyundai Motor India Ltd): Let me directly get to the sales numbers for the quarter. We achieved total sales of 2,19,072 units in Q2 fiscal year '27, compared to 1,90,921 units in the corresponding quarter, a growth of 14.7% year-on-year. On Q-on-Q, volumes grew by 23%, supported by growth in both domestic and export markets. In domestic, we sold 1,65,772 units compared to 1,39,521 units in the same quarter last year. This helped us with a healthy growth of 18.8% year-on-year. Despite a challenging geopolitical environment, exports grew 3.7% on year-on-year. Moreover, exports grew 38% on sequential basis, supported by strong demand across markets. Export volume contribution stood at 24% in Q2 fiscal year '27. Domestic volumes witnessed growth across segments, both on year-on-year and Q-on-Q basis. SUV mix remained healthy in both urban and rural markets. We continue to witness increased traction in our CNG sales. During the quarter, our CNG sales volumes grew by 48% on year-on-year basis. Our CNG contribution has grown consistently every quarter, improving from 15.2% in Q2 fiscal year '26 to 19.1% in Q2 fiscal year '27. Now, coming to financial highlights. Q2 fiscal year '27 witnessed our highest-ever top-line performance for any quarter since our inception. Revenue from operations in Q2 fiscal year '27 stood at Rs. 2,06,961 million as against Rs. 1,74,608 million in the corresponding quarter. This resulted in a revenue growth of 18.5% on year-on-year basis. However, raw material cost inflation exerted pressure on profitability. EBITDA stood at Rs. 19,745 million as compared to Rs. 24,289 million in Q2 fiscal year '26. EBITDA margin was at 9.5% as compared to 13.9% in Q2 fiscal year '26. EBIT stood at Rs. 14,191 million for the quarter as against Rs. 19,114 million in Q2 fiscal year '26. EBIT margin was at 6.9% in Q2 fiscal year '27. PAT for the quarter was Rs. 11,962 million as against Rs. 15,723 million in the corresponding quarter. PAT margin was 5.7% in Q2 fiscal year '27 as against 8.9% in Q2 fiscal year '26. Turning to profitability drivers for the quarter. On year-on-year basis, we had positive levers like higher volumes, favorable currency and price hikes. However, raw material cost inflation was so steep, which impacted the margin. On a Q-on-Q basis, we were able to deliver profit growth with the support of higher volumes, favorable product and export mix and cost-saving initiatives, which helped to mitigate the raw material cost headwinds. Our EBITDA grew by 31%, whereas PBT and PAT both grew by 35% on a Q-on-Q basis. Lastly, I want to conclude the presentation by highlighting that despite a challenging business environment, we remain firmly anchored to our core fundamentals. Amidst the competitive market landscape and absence of new models, we were able to maintain disciplined pricing and also deliver improved ASP, reflecting our continued focus on quality of sales. Our domestic discounts have come down from 3.2% in Q2 fiscal year '26 to 2.9% in Q2 fiscal year '27. Our overall ASP improved by 2% on year-on-year basis. Our continued focus towards strengthening our local supply chain ecosystem has yielded positive results with our localization levels further inching up to 84% at tier 1 level in Q2 fiscal year '27. Looking ahead, we remain committed to disciplined execution and sustainable
K. S. Hariharan (Hyundai Motor India Ltd): quality-led growth. This concludes my presentation. Thank you all for your time and attention. Now, we open the floor for Q&A. Thank you.
Moderator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take our first question from the line of Chandramouli Muthiah from Goldman Sachs. Please go ahead.
Chandramouli Muthiah (Goldman Sachs): Hi, good evening, and thank you for taking my questions. My first question is just around the Bayon. I understand that this is a model which you will possibly start manufacturing in the Chennai plant, where there is some vacant capacity. So just want to understand, what is the sort of capacity that you think you'll need to allocate to the Bayon? And just related to to that on, on new models, just also wanted to understand the dedicated India EV, if there's any approximate time timeline that you think that the launch is going to be, possibly is it late late CY26 or do you think it is an event for next calendar year?
Tarun Garg (Hyundai Motor India Ltd): Thank you for your question. Tarun this side. So, yes, Bayon and and local EV both will be produced in the Chennai plant, which will help us take the Chennai plant capacity utilization to more than 90%. On numbers, if you su- if you see, we are doing about 170 odd thousand of Creta. We believe Creta plus Bayon put together, we should be looking at 250,000 annual volumes. So this is how we are looking at the volumes. Regarding the launch of the of the of the EV, it will be early of of next year, early of next year. So, early of next calendar, what I mean to say, early of next calendar, so January-February '27. Have I answered your question?
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