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Informist, Thursday, Jul. 30, 2026

 

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--Hyundai Motor: Fire accident at supplier end hit Q1 domestic sales 
--CONTEXT: Comments by Hyundai Motor mgmt in post-earnings press conference 
--Hyundai Motor: Gradually recovering from supply disruptions in July 
--Hyundai Motor: Exports too impacted due to supply issues in Q1 
--Hyundai Motor: Expecting strong recovery in export volume in Q2 onwards 
--Hyundai Motor: Working to meet 8-10% volume growth in FY27 
--Hyundai Motor: Remain committed to deliver 11-14?ITDA margin 
--Hyundai Motor: AI is helping to improving customer interactions 
--Hyundai Motor: To commence thrid shift at Pune plant from Oct 
--Hyundai Motor: Third shift at Pune plant to up Venue model volumes 
--Hyundai Motor: New models to improve Chennai plant utilisation 
--Hyundai Motor: Expect to improve market share in FY27 from 12.38% in FY26 
--Hyundai Motor: Plans to launch six CNG models by 2030 
--Hyundai Motor: Export back orders are very high 
--Hyundai Motor: Expect exports volumes to see jump in FY27 
--Hyundai Motor: FY27 capex seen at INR 75 bln 
--Hyundai Motor: 45-50% of planned capex may go in to new products 
--Hyundai Motor: May spend some capex on Pune plant expansion 
--Hyundai Motor: Rural market demand continue to grow 
 

 

MUMBAI/HYDERABAD – Hyundai Motor India Ltd. expects to stage a strong bounce back in terms of sales volume in the coming quarters, delivering the guided 8-10% growth for 2026-27(Apr-Mar), the company's management said in a post-earnings press conference Thursday. The volume growth will be supported by normalisation of production, strong demand, the upcoming festive season and the company's planned product launches, it said.   

 

During the June quarter, domestic sales and exports of Hyundai Motor were impacted by a fire incident at one of the manufacturing facilities of its automotive component supplier. "The first two months of the quarter reflected healthy momentum, with cumulative sales in April and May growing by 13% year-on-year, supported by a favourable demand environment and our strategic product actions. However, the fire incident at one of our supplier facilities temporarily impacted vehicle production in June," its Managing Director and Chief Executive Officer Tarun Garg said.  

 

"I'm happy to report that although we had announced that we expected to recover the impacted production within quarter two, we have already done most of it within July itself," Garg said. 

 

The carmaker's domestic sales grew 5.4% on year to 139,374 units in the June quarter. The growth, however, was below its initial expectations, the management said. The company's export volumes for the reporting quarter declined nearly 20% on year to 38,708 units. The company's exports for the quarter were impacted by the US-Iran war, which started towards the end of last fiscal and the temporary production disruption at the supplier's facility in June, Garg said. 

 

"Supported by healthy backorders, continued portfolio expansion, and our resilient operations, we expect strong recovery in export volumes from this (September) quarter onwards, and we remain confident in again delivering our stated full-year growth guidance of 8% to 10%," Garg said. The underlying fundamentals of the export business remain extremely strong, with a healthy order backlog across key markets and robust customer demand, he added.

 

The company's earnings before interest, tax, depreciation, and amortisation margin for the June quarter declined to 9.3% from 13.3% a year ago. Its EBIT margin contracted to 5.8% from 10.1% a year ago. Apart from the impact of the production disruption at the supplier's facility, which led to a fall in volumes, especially in certain high-margin models, and the war in West Asia, the company's margins for the quarter were also hit by higher commodity prices and costs related to capacity stabilisation, the management said. These pressures were, however, partly offset by a favourable foreign exchange rate and a calibrated pricing strategy, they added. 

 

On a sequential basis, the company's margins for the quarter were impacted by an increase in discounts and lower government incentives due to seasonality. "The sequential headwinds were partially mitigated by our continuous cost optimisation initiatives and also the absence of certain one-off expenses incurred in Q4 (Jan-Mar) financial year 26 (FY26)," Garg said.

 

Going forward, the company remains confident of delivering EBITDA margins within the guided range of 11–14% for FY27. As volumes recover and plant utilisation improves, Hyundai Motor expects its operating leverage to improve progressively. This, along with the company's cost optimisation initiatives, positions it to drive sustainable margin improvement during the remainder of the year, the management said. 

 

On the company's artificial intelligence-led transformation, the management said, AI is already part of its business. In sales and marketing, AI-powered solutions are helping the company enhance customer engagement and improve sales effectiveness. In manufacturing and supply chain, the company is working on multiple initiatives including AI-enabled quality inspection, predictive maintenance and production optimisation, the management said. In products, the company is advancing in-vehicle AI that will deliver natural, personalised and proactive experiences for customers. "We believe this AI-led transformation will be a key driver for Hyundai's next phase of growth and long-term value creation for stakeholders," the management said. 

 

The company said it is preparing to commence a third shift at its Pune facility from October instead of the original plan of mid-2028, Grag said. The maximum capacity of the Pune facility is 170,000 units per annum. The company plans to increase this to 250,000 units a year by 2028 and 300,000 units a year by 2030, the management said. The company's new Venue model is exclusively produced in the Pune facility. 

 

Further, the company expects capacity utilisation at its Chennai plant to improve with its two new models, the mid-SUV and the new EV, coming in. Both the products will be produced in the Chennai plant. With this, the company expects the plant's capacity utilisation to move closer to 90% from the current 83%, Grag said. 

 

Hyundai Motor plans to spend around INR 75 billion as capital expenditure in FY27. Roughly 45–50% of this will be spent on new products and around 30% will be spent on plant-related activities, which broadly include Phase 2 capacity expansion for the Pune facility and upgradation of the Chennai plant, the management said.

 

Hyundai Motor sees strong rural demand supported by better infrastructure and government support. "... in terms of growth, the growth was 23.2% in the rural markets as compared to 2.8% in the urban markets," a top company official said. Rural contribution reached 25.9% in the June quarter from 22.6% a year ago, he added.

 

Going forward, the company aims to improve its market share in FY27 from 12.3% in FY26. Given the increased acceptance of compressed natural gas models, the company is planning to launch six models with compressed natural gas by 2030. 

 

Hyundai Motor announced its June quarter earnings just before the market close. The carmaker reported a consolidated net profit of INR 8.89 billion for the quarter, down 35% on year and a revenue of INR 163.35 billion, down 0.5% on year.

 

Thursday, shares of the company closed 1.3% higher at INR 2,018.20 on the National Stock Exchange.  End

 

Reported by Arya S. Biju and Narayana Krishna

Edited by Saji George Titus

 

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