Hyundai Motor India Ltd — Q4 FY26

Hyundai Motor India Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=Nzas0kDFzSk Published: 5 days ago

0:00 Ladies and gentlemen, good day and welcome to Q4 and FY26 earnings conference call of Hyundai Motor India 0:07 7 seconds 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 0:16 16 seconds concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please 0:24 24 seconds note that this conference is being recorded. I now hand the conference over to Mr. Chiag Jen from MK Global Financial Services. Thank you and over to you. 0:36 36 seconds Thank you. Good afternoon and we welcome you all to the Q4 and FYI26 earnings conference call of Hundai Motor India 0:44 44 seconds Limited. Today we have with us Mr. Tarun G, managing director and chief executive 0:51 51 seconds officer. Mr. Wangu her, Chief Financial Officer, Mr. Gopalak Krishnan CS chief 0:59 59 seconds manufacturing officer Mr. Saran T function head finance and Mr. KS Harun 1:07 1 minute, 7 seconds head of investor relations from Hundai Motor India Limited. I would like to inform you that the call has been recorded. I would now I would now like 1:16 1 minute, 16 seconds to invite Mr. KS Haran, head of investor relations from Shundai Motor India Limited. Over to you Har. 1:24 1 minute, 24 seconds Thank you Shira. Good evening everyone. 1:27 1 minute, 27 seconds Welcome to the Q4 and financial year 26 earnings conference call. Before we begin, I want to remind you of the safe 1:35 1 minute, 35 seconds harbor. We may be making some forward-looking statements that have to be understood in conjunction with the uncertainties and the risk that the 1:44 1 minute, 44 seconds company faces. The conference call will begin with our MD and CEO remarks on the overall business in financial year 26 and outlook for financial year 27. 1:55 1 minute, 55 seconds followed by a brief presentation by me on Q4 and financial year 26 performance after which we will be happy to re 2:03 2 minutes, 3 seconds receive your questions. Now I hand over to our MD and CEO Mr. Tarun. Over to you sir. Thank you Har and good evening everyone. 2:12 2 minutes, 12 seconds As we complete our 30th year of operations in India, it feels like a moment to pause and reflect on the 2:19 2 minutes, 19 seconds journey. One that has been shaped by resilience, adaptability and a relentless pursuit of opportunities. 2:26 2 minutes, 26 seconds Over the years, we have consistently embraced evolving market dynamics and transformed challenges into avenues for growth. For us, this 30-year milestone 2:34 2 minutes, 34 seconds is not just a corporate achievement. It is a shared story of trust, pride, and progress. 30 years strong and the bond 2:42 2 minutes, 42 seconds between Hyundai and its customers is only getting deeper. 2:47 2 minutes, 47 seconds In fiscal 26, we have further strengthened this legacy by laying a solid foundation for our next phase of progression underpinned by the 2:55 2 minutes, 55 seconds commencement of our third manufacturing facility and pipeline of robust product launches. Together, these strategic 3:02 3 minutes, 2 seconds initiatives position us strongly to usher in the next era of Hyundai's growth in India. As you know, fiscal 26 3:11 3 minutes, 11 seconds marked a year of two distinct phases for the Indian automoil industry driven by a shift in policy and demand dynamics. The 3:19 3 minutes, 19 seconds first half remained largely underwhelming primarily due to muted customer sentiments. However, the landscape shifted meaningfully in the 3:27 3 minutes, 27 seconds second half following the GST rate rationalization in September which acted as a strong catalyst for recovery. This 3:35 3 minutes, 35 seconds shift coincided well with the commissioning of our new plant and product launch cycle kicking in. 3:41 3 minutes, 41 seconds Together these created strong leverage and allowed us to respond to the improving demand environment supporting 3:48 3 minutes, 48 seconds a steady acceleration in growth in the latter half of the year. Further, this sustained momentum culminated in a 3:55 3 minutes, 55 seconds strong quarter 4 fiscal 26 with our domestic volumes witnessing a growth of 8.5% on a year-on-year basis, marking 4:03 4 minutes, 3 seconds our highest ever quarterly domestic sales since inception. This growth was complemented by our agile product 4:10 4 minutes, 10 seconds intervention across segments. The refresh launch of Extter and Vera are poised to further accelerate volume 4:17 4 minutes, 17 seconds momentum in the coming quarters. The allnew venue continues to be a strong road driver, receiving an overwhelming 4:25 4 minutes, 25 seconds customer response while consistently scaling up volumes since its launch. 4:30 4 minutes, 30 seconds This has further reinforced our strong position in the compact SUV segment. 4:35 4 minutes, 35 seconds Also, we extremely proud that the all new venue has secured five-star safety rating under Bhat and CAP testing. We 4:42 4 minutes, 42 seconds believe this should strongly support the positive momentum going ahead. Our business performance was also boosted by 4:49 4 minutes, 49 seconds impactful marketing initiatives. In this context, Hyundai's part partnership with ICC marked a significant step which 4:57 4 minutes, 57 seconds enhanced customer centricity by driving deeper engagement leading to greater visibility. On the regulatory front, we 5:05 5 minutes, 5 seconds have fully met cafe requirements for fiscal 26. for cafe 3. Based on the recent draft, we have calculated the 5:13 5 minutes, 13 seconds requirements and we remain fully confident of meeting the compliance backed by our strong powertrain strategy. Beyond regulatory compliance, 5:22 5 minutes, 22 seconds our focus extends to building sustainable and responsible business. 5:27 5 minutes, 27 seconds ESG principles are embedded across our operations supported by robust frameworks. As a key milestone in this 5:34 5 minutes, 34 seconds journey, during the fiscal year, we have achieved RE 100 across facilities, reinforcing our commitment to clean energy adoption. 5:45 5 minutes, 45 seconds On exports, despite the ongoing geopolitical headwinds, our volumes grew by 9.4% yearonear in quarter 4. For full 5:54 5 minutes, 54 seconds year, our export performance witnessed strong volume growth driven by robust demand for our products across emerging markets and our continued focus on 6:02 6 minutes, 2 seconds expanding into new geographies. This enabled us to register a growth of 16.4% 6:10 6 minutes, 10 seconds significantly outperforming initial guidance of 7 to 8%. Our over overall 6:17 6 minutes, 17 seconds volumes during the year registered a growth of 1.7% with a healthy balance between domestic and exports. Moving on 6:25 6 minutes, 25 seconds to financial performance, we delivered a topline growth of 5% on both yearon-year and quarter quarter basis in quarter 4 6:32 6 minutes, 32 seconds fiscal 26 led by well better volumes and prudent pricing actions. On the profitability front, the ongoing commodity pressures along with 6:41 6 minutes, 41 seconds seasonality in exports business have impacted the margins on sequential basis. That said, we were able to partly 6:48 6 minutes, 48 seconds offset these through calibrated price increases along with continued focus on cost control efforts. In line with our 6:55 6 minutes, 55 seconds margin guidance of 11 to 14%, we concluded fiscal 26 with a strong AITA margin of 12.2% 2% reflecting solid 7:04 7 minutes, 4 seconds execution despite cost associated with capacity addition and commodity price pressures. This resilient performance 7:11 7 minutes, 11 seconds was supported by robust volume growth in exports, calibrated pricing strategy in domestic market and our productive cost 7:18 7 minutes, 18 seconds reduction efforts. [snorts] Moving on to fiscal 27, we have began the new financial year with a solid performance in April with domestic volumes 7:27 7 minutes, 27 seconds registering growth of 17% yearonear. As we move forward, we are well positioned to capitalize on the supportive demand 7:35 7 minutes, 35 seconds environment while strategically unlocking the incremental opportunities arising from upcoming product launches. 7:42 7 minutes, 42 seconds We feel very excited to inform you that during this financial year, we shall be introducing two completely new name 7:50 7 minutes, 50 seconds plates which have been keenly awaited by all of you. Both these launches are expected to meaningfully boost our 7:57 7 minutes, 57 seconds volumes and act as powerful catalyst for our next phase of growth. Of these two 8:04 8 minutes, 4 seconds new launches, one will mark the debut of our new localized dedicated EV in the 8:11 8 minutes, 11 seconds compact SUV space, accelerating our transition towards electrification and strengthening our future ready 8:18 8 minutes, 18 seconds portfolio. The other one will further expand our presence in the ICE SUV segment. Notably, both these launches 8:28 8 minutes, 28 seconds are positioned in high demand segments aimed at broadening our portfolio and deepening our presence. The upcoming EV 8:36 8 minutes, 36 seconds will mark our entry into a new segment while the ICE SUV will further reinforce our position in the mid SUV category. 8:45 8 minutes, 45 seconds When I say mid SUV, I mean more than 4 meters. Backed by these product actions and other initiatives, we remain 8:52 8 minutes, 52 seconds confident of delivering domestic volume growth of 8 to 10% in fiscal 27. Having 8:59 8 minutes, 59 seconds said that, our enhanced plant capacity and flexible operations position us to 9:06 9 minutes, 6 seconds swiftly respond to any further growth opportunities even beyond 8 to 10% should they arise during the year. on 9:15 9 minutes, 15 seconds exports. While the current macro environment is uncertain, the demand for our products remains intact across key markets, providing us confidence to 9:24 9 minutes, 24 seconds recover export volumes as the market conditions improve. Even in an extremely uncertain environment, we're determined 9:31 9 minutes, 31 seconds to go the extra mile and deliver volume growth of 8 to 10% in exports as well in fiscal 27. We will be continuously 9:40 9 minutes, 40 seconds strengthening our export resilience through market diversification and product launch actions. In quarter 4, fiscal 26, we commence exports of new 9:49 9 minutes, 49 seconds venue and we will continue to expand into newer geographies, further solidifying our presence. HMIL will in 9:57 9 minutes, 57 seconds fact serve as the global manufacturer for the new venue for HMC. 10:03 10 minutes, 3 seconds We will be launching Verap and Xterp in the export markets as well. Further the volumes will be strengthened by 10:11 10 minutes, 11 seconds introduction of extter LD in the LSD markets. Also the two new name plates 10:18 10 minutes, 18 seconds which we indicated are not only planned for the domestic market but will be considered for export markets as well in 10:25 10 minutes, 25 seconds due course. Our growth ambition plans will be fueled by aggressive investments of approximately 7,500 cr in fiscal 27 10:34 10 minutes, 34 seconds marking the highest ever capex in recent years. On margin front, despite the near-term headwinds, including the inflationary pressures and geopolitical 10:43 10 minutes, 43 seconds uncertainties, our endeavor would be to deliver margins within the guided range. 10:49 10 minutes, 49 seconds We will be taking calibrated actions to support margins going forward. As the upcoming two new models will be 10:56 10 minutes, 56 seconds manufactured at our Chennai plant, it will bring back utilization to healthy levels in Chennai. And of course, we are 11:04 11 minutes, 4 seconds continuously evaluating ways to increase production of venue in Pune. Goes without saying that we'll continue to 11:12 11 minutes, 12 seconds focus on proactive cost optimization measures including localization and value engineering efforts. In many ways, 11:20 11 minutes, 20 seconds we see fiscal 27 as a year of building strong momentum as we are gearing up with a lot of intent and energy. As we 11:30 11 minutes, 30 seconds complete 30 years of operations in India and enter the next phase of growth, we do so with strong conviction and a well- 11:37 11 minutes, 37 seconds definfined growth agenda committed to capturing the opportunities ahead. As you know, we already announced our capacity expansion plans of reaching 250,000 units in Pune by calendar 28. 11:50 11 minutes, 50 seconds Now I'm pleased to announce that following the completion of phase 2 expansion in calendar 28, we will fur 11:58 11 minutes, 58 seconds undertake further capacity expansion of 70,000 units at the Pune plant to support our future growth aspirations. 12:07 12 minutes, 7 seconds This will take our total capacity in Pune to about 320,000 units and overall capacity to more than 1.1 million units by 2030. 12:20 12 minutes, 20 seconds In order to be future ready, we are also leveraging AI across our operations. And we have a clear AI roadmap in place 12:27 12 minutes, 27 seconds aimed at unlocking unlocking opportunities across manufacturing efficiency, quality enhancement, supply chain optimization, and enhanced customer experience among others. 12:38 12 minutes, 38 seconds Finally, we feel confident that Hyundai will continue to be part of lives for the next 30 years and beyond, embracing 12:46 12 minutes, 46 seconds a future that is greener, smarter, and more inspiring. I'm happy to share that the board of directors have recommended 12:54 12 minutes, 54 seconds a dividend of rupees 21 per share for fiscal 26, which translates to a payout ratio of 31.4% 13:03 13 minutes, 3 seconds on the consolidated profit. Thank you for your patient listening. And now I hand it back to Har. 13:11 13 minutes, 11 seconds Thank you sir. 13:13 13 minutes, 13 seconds Starting with the highlights, this quarter clearly reflects how we are steering HMI into the next phase of 13:21 13 minutes, 21 seconds growth while simultaneously scaling our reach and deepening market presence. 13:27 13 minutes, 27 seconds During the quarter we have enhanced our existing models vera and extra by reigniting the design technology safety 13:37 13 minutes, 37 seconds and comfort which resonates well with today's young Indians. 13:42 13 minutes, 42 seconds The new venue continues to garner new milestones and recognitions. 13:48 13 minutes, 48 seconds Recently it has been crowned the compact SUV of the year by autocar. 13:54 13 minutes, 54 seconds All these demonstrate our consistent focus on agile product execution which aligns well with the evolving market needs. 14:05 14 minutes, 5 seconds Our efforts to scale reach while growing deeper or yielding tangible results. We achieved an all-time high rural 14:13 14 minutes, 13 seconds penetration underpinned by our strong product offerings and on ground efforts to strategically enhance our network 14:22 14 minutes, 22 seconds reach. Our CNG penetration which was 13% in Q4 financial year 25 has been 14:30 14 minutes, 30 seconds steadily growing now reaching 18% in Q4 financial year 26. 14:37 14 minutes, 37 seconds Aura recorded its highest ever quarterly sales in Q4 financial year 26. Notably, 14:44 14 minutes, 44 seconds the sales of this model were the highest on full year as well. 14:49 14 minutes, 49 seconds Crater continues its reign as a segment leader led by strategic product enhancements in line with evolving consumer needs. 15:01 15 minutes, 1 second Moving on to our sales performance during the quarter, we achieved total sales of 2 lak 8,275 15:08 15 minutes, 8 seconds vehicles in Q4 financial year 26 compared to 1 lakh 91,650 vehicles in the corresponding quarter, 15:18 15 minutes, 18 seconds reporting a healthy 8.7% year-on-year growth. In the domestic market, we sold 15:25 15 minutes, 25 seconds 1 lakh 66,578 vehicles compared to 1 lak 53,550 15:32 15 minutes, 32 seconds vehicles in the same quarter last year, a growth of 8.5%. 15:38 15 minutes, 38 seconds On exports, we had an incredible year with a strong performance across all quarters. Though Q4 was impacted by 15:46 15 minutes, 46 seconds geopolitical disruptions, we were still able to deliver a growth of 9.4% for this quarter on year-on-year basis. 15:56 15 minutes, 56 seconds This performance reflects our export resilience supported by diversified market presence and operational flexibility. 16:07 16 minutes, 7 seconds On fullear basis, our overall volumes grew by 1.7%. 16:12 16 minutes, 12 seconds Majorly supported by strong export growth of 16.4% for the year and rebound in domestic volumes in H2. 16:23 16 minutes, 23 seconds With respect to domestic segment mix, SUVs continued to be the major contributor to our volumes. Notably, 16:32 16 minutes, 32 seconds hatchers and sedans showed growth during the quarter, aided by GST benefits and our product actions. 16:41 16 minutes, 41 seconds Talking about the fuel mix, a clear shift is visible away from traditional fuel options towards more eco-friendly 16:49 16 minutes, 49 seconds power trains and our multi- powertrain strategy positions us well to capture diverse needs of the market. 16:58 16 minutes, 58 seconds Now coming to financial performance for the quarter, our revenue from operations stood at rupees 1 lak 89,162 17:06 17 minutes, 6 seconds million in Q4 financial year 26 as against rups 1 lak79,43 million in the corresponding quarter. 17:16 17 minutes, 16 seconds Revenue grew by 5.4% yearonear due to better volumes and prudent pricing actions. 17:24 17 minutes, 24 seconds IATA stood at rupees 19,660 million as compared to rups 25,327 million in Q4 financial year 25. 17:35 17 minutes, 35 seconds EITA margin stood at 10.4% as compared to 14.1% in Q4 financial year 25. 17:43 17 minutes, 43 seconds AIT stood at rupees 13,824 million for the quarter as against rups 20,23 million in Q4 financial year 25. 17:54 17 minutes, 54 seconds A bit margin stood at 7.3%. 17:57 17 minutes, 57 seconds Pad for the quarter was rups 12,556 million as against rups 16,143 18:05 18 minutes, 5 seconds million in the corresponding quarter. We delivered a pat margin of 6.5%. 18:12 18 minutes, 12 seconds Let me now explain the reasons for the margin movement. 18:17 18 minutes, 17 seconds On year-on-year comparison, if you see PBT for Q4 financial year 26 reflects elevated commodity prices, cost 18:26 18 minutes, 26 seconds associated with capacity addition and unfavorable product mix. Though volumes were better, the cost pressures 18:34 18 minutes, 34 seconds outweighed the benefits leading to a decline in margins on year-on-year basis. 18:40 18 minutes, 40 seconds On sequential basis, better volumes, calibrated pricing actions and higher government incentives helped partially 18:48 18 minutes, 48 seconds offset the impact of commodities and unfavorable sales mix during the quarter. 18:55 18 minutes, 55 seconds On fullear basis, revenue from operations stood at rupees 7 lakh7,633 19:01 19 minutes, 1 second million in financial year 26 as against rups 6 lak 91,929 million in the corresponding period. 19:11 19 minutes, 11 seconds EITA stood at rupees 85,985 million as compared to rups 89,538 million in financial year 25. 19:21 19 minutes, 21 seconds EITA margin was at 12.2% 2% well within the guided range. EIT stood at rupees 19:28 19 minutes, 28 seconds 64,5 million for financial year 26 as against rupes 68,485 million in financial year 25. 19:37 19 minutes, 37 seconds EIT margin was at 9% as compared to 9.9% in financial year 25. 19:44 19 minutes, 44 seconds PAT for financial year 26 was rupees 54,315 million as against rups 56,42 19:53 19 minutes, 53 seconds million in the corresponding period. We delivered a pat margin of 7.6% as against 8.1% in financial year 25. 20:04 20 minutes, 4 seconds While H1 was very strong for us, the margins softened in H2 due to a combination of factors such as cost 20:12 20 minutes, 12 seconds associated with capacity addition and elevated commodity prices. 20:19 20 minutes, 19 seconds Coming to the outlook as highlighted by our MD and CEO, we are entering financial year 27 with a strong 20:26 20 minutes, 26 seconds conviction and clear strategic direction to translate the momentum into sustainable and measurable growth. We believe we are well positioned to 20:34 20 minutes, 34 seconds strengthen scale, enhance competitiveness and drive the next phase of growth. This concludes my 20:41 20 minutes, 41 seconds presentation. Thank you all for your time and attention. Now we open the floor for Q&A. Thank you. 20:48 20 minutes, 48 seconds 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 the touchdown telephone. 20:58 20 minutes, 58 seconds 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 and to restrict to two questions at a time. 21:09 21 minutes, 9 seconds Ladies and gentlemen, we will wait for a moment while the question queue assembles. 21:15 21 minutes, 15 seconds We'll take our first question from the line of Capil Singh from Namora. Please go ahead. 21:24 21 minutes, 24 seconds Yeah. Hi. Uh good evening sir and thank you so much for your uh opening remarks which are very helpful. Uh yeah good to 21:33 21 minutes, 33 seconds hear uh such energetic uh commentary given the tough conditions. Uh sir my question is just 21:40 21 minutes, 40 seconds follow up on the uh guidance we have given. Uh so firstly on the margin side if we can articulate uh we are currently 21:49 21 minutes, 49 seconds at about 10 and a half% margins and uh we are guiding for a range of 11 to 14% 21:56 21 minutes, 56 seconds there seems to be further commodity pressure. So what are the margin levers we are thinking of from here? Uh that 22:04 22 minutes, 4 seconds and also in the current quarter how much commodity pressure did we face and when we look at next quarter uh what is the 22:13 22 minutes, 13 seconds commodity pressure and how much is the pricing action uh that we have taken. 22:20 22 minutes, 20 seconds Capill your line please. There's some background disturbance on your line. Thank you. Yes. So should I repeat the question? 22:30 22 minutes, 30 seconds No no no uh it's fine I got the question uh if you if you see uh first of all on commodity as you asked last quarter the 22:38 22 minutes, 38 seconds impact on margins uh was roughly 120 basis points uh if you compare on a sequential basis and uh I would say that 22:47 22 minutes, 47 seconds out of this 120 basis points roughly 50 to 60 points would be kind of a one-off uh which might not recur in the upcoming 22:55 22 minutes, 55 seconds quarters and in terms of price increase again as you know that already we did a price increase in January uh to the tune 23:03 23 minutes, 3 seconds of 60 basis points uh followed by a selective price increase for venue in the month of March and we will be doing 23:10 23 minutes, 10 seconds one more price increase in May as well right uh in terms of the overall margin outlook see if you understand uh the Q4 23:19 23 minutes, 19 seconds profitability of course we had some headwinds we clearly explained in our uh presentation as well uh the commodity prices were uh at a at an elevated level 23:28 23 minutes, 28 seconds and we also had a few one-off impact in terms of uh labor code uh you know cost impact hitting our employee cost and uh 23:36 23 minutes, 36 seconds you know other factors as well. Uh so near-term the commodity headwinds are expected to continue. Uh I think we need 23:44 23 minutes, 44 seconds to admit that at the same time uh we also have some positive levers for us to drive the margins in the positive 23:51 23 minutes, 51 seconds direction uh you know uh even in financial year 27. I would like to you know just uh give a little bit more details on this. Uh number one is the 24:00 24 minutes volume growth itself. See we have already guided 8 to 10% of growth uh both in domestic as well as export markets. Number two uh the price 24:09 24 minutes, 9 seconds increases multiple price increases which we have done and uh you know that should also support our margins to some extent. 24:17 24 minutes, 17 seconds And third important point is the utilization level of our Chennai plant. 24:21 24 minutes, 21 seconds See uh as you know Chennai plant utilization has uh come down a bit you know after we shifted our uh revenue to 24:28 24 minutes, 28 seconds the Pune plant but now that uh the two upcoming two products uh both will be coming from the Chennai plant that 24:36 24 minutes, 36 seconds should you know help to increase the overall output and uh you know improve the capacity utilization of Chennai plant and obviously that should support 24:44 24 minutes, 44 seconds my margins as well. Number four, there are few one-offs as I indicated uh in terms of commodity and uh labor code 24:52 24 minutes, 52 seconds impact. So that should not ideally repeat in the upcoming quarters. And last but not the least uh if you see the cost optimization measures whatever we 25:00 25 minutes have been doing in terms of uh uh localization enhancement and value engineering efforts, these efforts should continue even in the upcoming 25:08 25 minutes, 8 seconds future as well. So you know if you consider all these factors that is clearly giving us a confidence that we can still deliver margins uh you know 25:17 25 minutes, 17 seconds within the range of 11 to 14% in the upcoming year. Hope I've answered your question Kapil. 25:24 25 minutes, 24 seconds Yes uh thanks a very very helpful and detailed answer. Uh so second question is on just on the growth for both 25:32 25 minutes, 32 seconds domestic and exports particularly in exports I noticed that our u you know exposure to middle east is quite high but we have still guided for 10% growth 25:41 25 minutes, 41 seconds and our volumes have been fairly resilient so uh just some color there uh would be helpful and similarly for 25:48 25 minutes, 48 seconds domestic as well uh 7 to 10% growth uh do you think you will gain market share this year uh given that you are having 25:55 25 minutes, 55 seconds uh new launches so some color on the domestic IC demand side as well. That's all from my side. 26:02 26 minutes, 2 seconds Uh yes, Capil. First of all, on the uh export front um correct the uh after the war started, we have been uh impacted by 26:10 26 minutes, 10 seconds this uh the uh the war situation. Our exposed to Middle East have taken a hit. 26:16 26 minutes, 16 seconds Uh but we have been taking some uh counter measures to to protect our export volumes. Number one, uh uh we have been aggressively focusing on other 26:24 26 minutes, 24 seconds markets, right? Even in the last quarter we we kind of increased our shipments to uh some of the markets like Latin America, Mexico you know that has really 26:33 26 minutes, 33 seconds helped us to to some extent. Number two uh you know we are also continuously strengthening our product offerings uh 26:41 26 minutes, 41 seconds for the overseas markets as well right uh the new venue a lot of opportunities for us in the days to come vera PE extra 26:48 26 minutes, 48 seconds PE even the LSG version of extter uh you know that should also support our volumes to some extent plus even the the two new name plates which will come uh 26:57 26 minutes, 57 seconds this year not just for domestic market I think uh it will be considered for export also in a due course of time 27:04 27 minutes, 4 seconds right uh and one more important point is uh uh if you see the demand as such it has been pretty strong for us quite 27:12 27 minutes, 12 seconds healthy across markets even in middle east also uh we are having a healthy back order with us. 27:18 27 minutes, 18 seconds you know that is giving us the confidence that once the whole uh you know macro and geopolitical uh condition you know starts improving uh you know 27:26 27 minutes, 26 seconds the volume should come back very strongly for us and so is the reason we were able to give a a guidance of 8 to 10% growth even in fiscal year 27 uh in 27:35 27 minutes, 35 seconds a totally uncertain environment uh we hope that we can definitely achieve our targets whatever we have promised now uh the second question on domestic if 27:44 27 minutes, 44 seconds you see uh capel crystal and IRA the uh the forecast is 3 to 5% or 4 to 6%. Very 27:52 27 minutes, 52 seconds difficult to to see you know in this kind of situation. So we believe 8 to 10% with the with like we said like I said in my opening remarks that we will 28:01 28 minutes, 1 second be looking to if in case any up opportunity comes we have the capacity of course we have the new model so we will we we will be very quick very agile 28:09 28 minutes, 9 seconds to uh to grab that. So we are fairly confident that we will be able to outpace the industry in this fiscal and gain market share. Thank you. 28:20 28 minutes, 20 seconds Okay, great sir. Best wishes. 28:23 28 minutes, 23 seconds Thank you. Next question is from the line of Binay Singh from Augen Stanley. Please go ahead. 28:31 28 minutes, 31 seconds Uh hi team uh thanks for the opportunity. Uh clearly the company will have a very busy year. Uh I can't recall the last time you had two heavily 28:39 28 minutes, 39 seconds localized name plate launches in one year. uh just on that you know in the presentation that we did in October we talked about two launches over FI27 FI28 28:48 28 minutes, 48 seconds so is this are these the two so in a way we'll be done for two years with this is is that the correct understanding so you remember you have a sharp memory 28:57 28 minutes, 57 seconds so we are exactly sticking to whatever we whatever we said at this point of time if you see by by now we we would 29:05 29 minutes, 5 seconds have launched one full model change which was the venue one derivative which was the venue endline uh two facelifts which were extter and 29:13 29 minutes, 13 seconds varn uh so uh last fiscal exactly as per that and of course for the next two years we had given I think three full 29:21 29 minutes, 21 seconds model changes two new models so we are going exactly as per that whatever we had guided I think beyond this of course if more opportunities come we will look 29:28 29 minutes, 28 seconds at it but as of now you can say that we stand heavily committed to whatever we had told you 29:36 29 minutes, 36 seconds right right and just secondly linked to that uh any guidance on what timing do we expect during the year? You know, the reason I ask is because when I look at 29:44 29 minutes, 44 seconds your March volumes on the domestic side and if I just annualize that, not the right way to do given March is usually a big quarter, but that itself will imply 29:53 29 minutes, 53 seconds a very healthy 10% plus domestic growth for us uh in financial year 27. So is it fair to assume then you are basically 30:01 30 minutes, 1 second not building much volumes from these models into your 8 10% guidance for now or or any timeline you could say is it 30:09 30 minutes, 9 seconds towards the end of the year or so b I think we have given enough guidance on this I can only say that of course April volumes were already 17%. Like I 30:18 30 minutes, 18 seconds said the geopolitics situation is very fluid. We still don't know about what will happen in the Iran war and all. So what we are saying is we are very agile 30:26 30 minutes, 26 seconds and very flexible and uh we will see how the opportunities come and the volume from these two models is going to be substantial. So it's not going to be 30:34 30 minutes, 34 seconds like uh very small it's going to be substantial even in this fiscal. 30:40 30 minutes, 40 seconds Yeah. Yeah. No no that uh clearly uh exciting year ahead you know we'll keenly watch uh thanks again for uh increased disclosures. Thank team. 30:49 30 minutes, 49 seconds Thank you. Thank you. 30:52 30 minutes, 52 seconds We'll take our next question from the line of Ragunan NL from Noama Research. Please go ahead. 31:01 31 minutes, 1 second Thank you sir for the opportunity and heartening to see the positive outlook for FI27 31:08 31 minutes, 8 seconds uh uh with regards to the capex of 7,500 crores uh can you please indicate the 31:15 31 minutes, 15 seconds areas and uh indicate a broad breakdown if possible? 31:22 31 minutes, 22 seconds uh Ragu Har capex plan uh yes out of this 7,500 crores a major part roughly 31:30 31 minutes, 30 seconds around 45 to 50% would go into the upcoming new products that is number one 31:37 31 minutes, 37 seconds number two roughly uh around 30% of the the whole capex will also go into uh plant related investments when I say 31:45 31 minutes, 45 seconds that that means uh some portion will go for the phase 2 expansion in Pune And there will be some investments for upgradation of the Chennai plant as 31:53 31 minutes, 53 seconds well. So that is a broader plan you know as far as capex is concerned. 32:01 32 minutes, 1 second Uh thank you Har very helpful and uh also uh with reference to the one-offs that you mentioned uh can you can you 32:10 32 minutes, 10 seconds quantify them because uh on a QQ basis employee cost which is up 34%. uh what 32:17 32 minutes, 17 seconds should be the sustainable number one should look at there and also that uh 50 60 basis point within the commodity cost 32:26 32 minutes, 26 seconds which is not likely to recur. What does that relate to? 32:32 32 minutes, 32 seconds Okay, first of all on uh uh employee cost if you see uh on a sequential basis we have seen uh uh you know we can 32:39 32 minutes, 39 seconds understand roughly 100 crores uh increase uh which is reflected uh large part of this relates to the uh 32:46 32 minutes, 46 seconds impact of labor code provisions u and uh there is some uh uh you know accounting impact relating to the actuarial 32:54 32 minutes, 54 seconds provisions also some assumptions we have revisited so that is also reflected there uh we can understand that major 33:01 33 minutes, 1 second part of this is kind of a one-off should not ideally repeat in the upcoming uh quarter and on commodity the one-off 33:09 33 minutes, 9 seconds impact refers to basically we we paid some vendor compensation during the quarter uh for the past period so that is the reason I mentioned that it is a 33:17 33 minutes, 17 seconds kind of one-off for us hope it is clear au uh yeah thank you very much that is very 33:25 33 minutes, 25 seconds helpful uh just the last one uh almost 90 sales outlets have been added did this year and uh how has been the focus 33:34 33 minutes, 34 seconds on the rural side and going forward how do you target the increase in network that's all from my end 33:42 33 minutes, 42 seconds so Ragu we are going very strong uh on the network overall also and like I mentioned in my last call as well almost seven out of 10 outlets are coming in 33:51 33 minutes, 51 seconds the rural areas the good part rau is one of course rural penetration continues to increase quarter 1 was 22.6 it moved to 33:58 33 minutes, 58 seconds 23.6 six in the next quarter then quarter 3 24.1 and quarter four was at historic high 24.7 34:06 34 minutes, 6 seconds but the best part is now now the urban has also started growing so first two quarters urban was negative then quarter three it became plus one and now quarter 34:14 34 minutes, 14 seconds four plus 7 so we believe that going forward especially post GST the opportunities in rural are also very 34:21 34 minutes, 21 seconds strong supported by our network uh you know and of course our marketing activities our 30-year celebration so we 34:28 34 minutes, 28 seconds believe that our focus will continue at least for the next couple of years in this ratio of seven is to three broadly 34:36 34 minutes, 36 seconds seven outlets in urban oh sorry in rural versus three outlets in urban I think that pretty much takes care of you know 34:42 34 minutes, 42 seconds our our plan going forward thank you thank you very helpful I'll call back to 34:51 34 minutes, 51 seconds the queue next question is from the line of Chandra Moli Mutaya from Goldman Sachs please go ahead 35:01 35 minutes, 1 second Hi, good evening and thank you for taking my questions. Um, my first question is just another clarification on the product launch disclosures. Thank 35:08 35 minutes, 8 seconds you for those disclosures. Uh, you did mention in the prepared remarks that you expect for substantial volume accession 35:15 35 minutes, 15 seconds this year from these two new product launches. So just wanted to understand are they likely to be sort of in timing terms prefestive seasons and just also 35:24 35 minutes, 24 seconds related to the product launch point um now that there'll be two launches this year uh is it fair to assume that the MPV and the off-roaders might actually be more in the FI29 FI30 launch cycle? 35:38 35 minutes, 38 seconds Not I'm not commenting you're not luring me into any further disclosures. So uh sorry I think like I said two new name plates in this fiscal is what we are sticking to. These both will be SUVs. 35:49 35 minutes, 49 seconds One will be in the ice, one will be in the EV. The ice one will be in the mid SUV. EV will be in the compact SUV. Uh 35:57 35 minutes, 57 seconds and it will be a dedicated EV and both will have substantial volumes. So I think I'm sorry but I'm only repeating uh I I don't have anything further to 36:04 36 minutes, 4 seconds add. Uh and we are sticking strongly to the investor day commitment which we made you know in terms of launch plan. 36:11 36 minutes, 11 seconds Thank you. 36:15 36 minutes, 15 seconds Well understood. Well understood. Thanks Haron. Um the second question is just related to margin. So some of the two 36:22 36 minutes, 22 seconds wheel makers who reported and made given commentary on on um commodity costs have indicated that commodity inflation could 36:29 36 minutes, 29 seconds be anywhere between 300 to 400 basis points headwinds in the upcoming quarter. So just you know similar to the margin bridge that you've given just 36:37 36 minutes, 37 seconds want to understand thinking about the factors um heading into sort of first half of mixes still uh is that sort of a similar range for the car industry as 36:46 36 minutes, 46 seconds well to keep in mind there's sort of a gross headwind um on the commodity front um in terms of gross margin for the company. 36:56 36 minutes, 56 seconds uh Chandra Har here uh of course very difficult to uh give a guidance on how much the commodity will increase because it is highly volatile right uh but 37:05 37 minutes, 5 seconds near-term there is there is expected to be some pressure should be there uh but as I mentioned earlier also uh how we are managing this whole situation number 37:14 37 minutes, 14 seconds one is through the uh cost reduction efforts with localization and other activities number two we have been taking some calibrated price increases 37:22 37 minutes, 22 seconds also right uh you know already as you know that uh uh whatever a price increase which we did last quarter and there is one more to come uh in the 37:30 37 minutes, 30 seconds month of May as well. So I think broadly this should take care of uh you know the whole profitability uh you know as such 37:37 37 minutes, 37 seconds and uh uh our uh you know strategy is we want to take a proper balance between uh volumes and profitability. So the price 37:45 37 minutes, 45 seconds increase also is something we need to look at the overall market condition accordingly we'll take a you know a calibrated call on this uh uh aspect. 37:55 37 minutes, 55 seconds Got it. Got it. And last quick followup is just on cafe 3. Um three quarters back you did make a disclosure that um you had done close to 113 grams per 38:04 38 minutes, 4 seconds kilometer CO2 um in the in one queue this year. So just want to understand how you ended FI26 in terms of cafe 3 38:12 38 minutes, 12 seconds and uh what your targets might be target ranges might be for FY27. 38:17 38 minutes, 17 seconds Just a correction fiscal 26 was cafe 2 not cafe 3. So cafe 2 the target was 117.585. 38:24 38 minutes, 24 seconds Uh yeah yeah. So target was 117.585. We ended with 114.49. 38:30 38 minutes, 30 seconds This is minus 3.095. So we are much better you know because we are much better than the target. Uh this is as 38:38 38 minutes, 38 seconds per our internal calculation and uh and like I said we are very confident about the cafe 3 as well. Of course only draft has come so far but based on that draft 38:47 38 minutes, 47 seconds and based on our power train plan we are very confident we are going to meet cafe 3 as well. Hope that answers your question. 38:55 38 minutes, 55 seconds All right. Thank you very much and all the best. Thank you. 38:58 38 minutes, 58 seconds Thank you. We'll take our next question from the line of Gungjan Pritani from Bank of America. Please go ahead. 39:07 39 minutes, 7 seconds Yeah. Hi, thanks for taking my question. 39:09 39 minutes, 9 seconds Just um two followups. One on the margin can you talk about the discounts for this quarter and also where we are on 39:17 39 minutes, 17 seconds the new plant related cost. I mean there was supposed to be some 30 40 basis point of impact to come in this quarter has it fully reflected or something else that we need to bear in mind. 39:29 39 minutes, 29 seconds Uh hi GJ Har first of all on the discounts uh this quarter quarter four we have reduced our discount 39:36 39 minutes, 36 seconds substantially in third third quarter the discount was 2.6% on ASP now in quarter four the number reduced to 1.9%. 39:46 39 minutes, 46 seconds Right? And uh uh number two in terms of the uh Pune cost we already indicated earlier also uh you know there are 39:54 39 minutes, 54 seconds elements in terms of you know the overhead cost and depreciation those things generally you know have an impact on the margins. Uh what happens is uh 40:03 40 minutes, 3 seconds you know as we do more ramp up of operations obviously there might be increase in some cost elements but at the same time we are also increasing our 40:11 40 minutes, 11 seconds volumes as well. If you see venue which is what we are producing from Pune plant already we are seeing a strong traction uh in the domestic market uh you know we 40:20 40 minutes, 20 seconds are continuously trying to increase the overall uh you know production and sales volumes and uh even uh export also there are a lot of opportunities we are 40:28 40 minutes, 28 seconds looking at uh for the new venue. So if you see collectively the increased volumes you know should should be able to you know help us to absorb all these 40:37 40 minutes, 37 seconds fixed cost as early as possible and uh you know that should improve the the margins as well. 40:43 40 minutes, 43 seconds Hope I'm clear. Uh Gujan got it. Yeah, I'm just checking from a depreciation perspective. Um is that 40:51 40 minutes, 51 seconds fully reflected in this quarter or there could be more increase uh that we were expecting to show up in this quarter? 41:00 41 minutes Uh of course see uh last quarter the major uh impact was was already reflected in third quarter. Again as I mentioned that uh whenever we do some 41:08 41 minutes, 8 seconds ramp up uh you know uh obviously that will lead to some increase in the cost elements. So but again the volume should take care of all these you know increased cost. 41:17 41 minutes, 17 seconds Okay. 41:19 41 minutes, 19 seconds Okay. Got it. And um second question on uh cafe norms. Uh any uh you know can you share a little bit more about the 41:28 41 minutes, 28 seconds new um EV model that you you know that is due for launch this year. Um you did 41:35 41 minutes, 35 seconds mention a compact uh um SUV model. uh but is this a model that sort of uh comfortably puts her in puts us in the 41:44 41 minutes, 44 seconds cafe compliance? Anything that you can talk us through and you know in terms of what is the EV share within the portfolio that's needed over a three 41:52 41 minutes, 52 seconds year or a five year horizon to be compliant with the cafe norms and is this the model that sort of can be the volume model uh for for us. 42:03 42 minutes, 3 seconds Quan, we have given many disclosures today. Like we said, it's a first mass market dedicated EV from Hyundai. It has 42:10 42 minutes, 10 seconds been designed and made keeping India in mind. It is going to come in this fiscal much before the cafe 3 norms kick in and 42:19 42 minutes, 19 seconds it we are expecting it to be in a high volume segment. That is point number one. Point number two, of course, they will it will be a big booster for us for 42:26 42 minutes, 26 seconds cafe. But cafe is not only about one model and one EV. I think we have a very robust uh you know plan of a comprehensive plan for cafe and I think 42:34 42 minutes, 34 seconds we are very clearly making a disclosure that we are very confident about meeting the cafe 3. I think at this point beyond this it will be very difficult for me to 42:42 42 minutes, 42 seconds say anything but as we go along during the year you will see uh we talking more and more about these new launches I 42:49 42 minutes, 49 seconds think which will but we don't want to tell everything today you know because we have to build the excitement keep the excitement running as well. Yeah, thank you. 42:57 42 minutes, 57 seconds Sure, understand. Can I just follow up on the profitability? Uh, you know, this 11% to 14% range that as the this mass 43:06 43 minutes, 6 seconds EV volume model comes through, uh, does that have any bearing on the margin uh 43:13 43 minutes, 13 seconds in the near term or anything? I mean, this is not going to be as profitable as the rest of the portfolio. So, how do we think about the ramp up of this model in context of the overall portfolio margin? 43:24 43 minutes, 24 seconds Look when the range of 11 to 14% has been given it takes into account all the new models in all the segments whether it is EV or petrol or hybrid or diesel 43:33 43 minutes, 33 seconds or SUV or small cars. So trust us I mean we have done our calculations and but beyond this to get into okay this model 43:40 43 minutes, 40 seconds how much profit it will be very very difficult for us to give more details but like I said it is well documented and we have been very responsible in our 43:48 43 minutes, 48 seconds margin guidance and that is why you see it's a broad 11 to 14% guidance you know and we are very confident that yes we 43:54 43 minutes, 54 seconds will achieve this yeah thank you got thank you so much thank you next question is from the line of Amen and Pirani from JP Morgan. 44:06 44 minutes, 6 seconds Please go ahead. 44:09 44 minutes, 9 seconds Yes. Hi. Uh thanks for the opportunity and thanks for the detailed uh disclosure on the outlook. Uh my first 44:16 44 minutes, 16 seconds question is on the ESU. Um just wanted to check you know uh is this also the product uh in which you would be 44:24 44 minutes, 24 seconds embarking on the cell localization project also in which Hyundai group as a group has tied up with you know a local 44:32 44 minutes, 32 seconds player for cell localization as well. So just wanted to check on that. 44:37 44 minutes, 37 seconds So like I said uh for today the disclosures have already been made I think. Please wait going forward for more announcements on this. Yeah thank you. 44:46 44 minutes, 46 seconds Sure sure. Fair enough. Uh secondly, uh you know just on your uh point that you know both these products will be coming 44:53 44 minutes, 53 seconds in the Chennai plant. So uh I I just wanted to understand you know given that the Pune plant still has you know a lot 45:00 45 minutes of capacity you know ramp up to happen and given that as of now we only know about the venue um if both of these are 45:07 45 minutes, 7 seconds going to Chennai you know how does the overall utilization and you know fixed cost absorption work because we thought that maybe these will come in Pune. So 45:16 45 minutes, 16 seconds just for my understanding you know how does the overall level work on fixed cost absorption and utilization. 45:22 45 minutes, 22 seconds No it works it works beautifully uh because uh you know frankly speaking in two shifts Pune plant cannot do much 45:29 45 minutes, 29 seconds more than the current level of 13140. Of course we are trying to do best like I said we started with 8,000 per month. We have already moved to 12,000 per month. 45:36 45 minutes, 36 seconds Uh but like we said Pune plant on a three shift is 170,000. So there is unless we add a shift to the Pune plant 45:44 45 minutes, 44 seconds you know how much more you can do. So Chennai plant provides us with a great opportunity because if you see one very good reason for our strong profitability 45:51 45 minutes, 51 seconds all these years has been the 90 95% capacity utilization in the Chennai plant but because the venue was shifted we had this temporary uh you know drop 46:00 46 minutes in the capacity utilization and now with these two models going to Chennai we will be very good in Chennai anyway we are very good in Pune especially in a two shift operation and like Har 46:09 46 minutes, 9 seconds mentioned we will look at the third shift also in case we feel that this volumes are enough to support a three shift population. Thank you. 46:18 46 minutes, 18 seconds Okay. Thank you. Thank you. And just just the last question you know on the on the PBT bridge um you know uh uh hurry if you can. Uh so you know if I 46:27 46 minutes, 27 seconds look at the quarter on quarter Q4 over Q3 uh you know you mentioned that volume and mix was a slight positive. Now uh 46:36 46 minutes, 36 seconds given that actually your mix this quarter was significantly adverse because exports were lower as well as I 46:43 46 minutes, 43 seconds think the SUV mix was lower relatively um are we to understand that volume was 46:51 46 minutes, 51 seconds you know high enough to offset the mix impact and volume is a bigger driver than mix just wanted to understand that 47:00 47 minutes uh yes I mean that's a broader understanding so uh you know we had you know better volumes especially in the domestic market. So that has you know really helped us on a sequential basis. 47:10 47 minutes, 10 seconds At the same time like I said like we said two new SUVs in the next year will ensure that we start we grow in very 47:17 47 minutes, 17 seconds well in the SUV segment and this is an added advantage that all the segments have started growing. So we are not complaining at all uh and like we said 47:25 47 minutes, 25 seconds because it is helping really helping the Chennai capacity utilization even before the new models are kicking. Thank you. 47:33 47 minutes, 33 seconds Great. Thanks for this. Uh I I'll come back in the queue. Thank you. 47:37 47 minutes, 37 seconds Thank you. We'll take our next question from the line of Arvin Sharma from city. Please go ahead. 47:46 47 minutes, 46 seconds Hi, good evening sir. Thank you for taking my question. Uh first would be on the exports guidance um at almost 8 to 47:53 47 minutes, 53 seconds 10% growth. uh previously capacity would have been a constraint but now that your capacity has increased uh significantly 48:00 48 minutes what's the underlying basis for 8 to 10% growth are you pricing in the current uh adverse geopolitics or is 8 to 10% 48:08 48 minutes, 8 seconds growth an intended growth on the exports part that that's the overall growth as well 48:16 48 minutes, 16 seconds uh hi Arvin uh see again if you if you if you look at the overall situation so quite dynamic in nature um our Middle 48:24 48 minutes, 24 seconds East you know volumes have been impacted uh even in the last quarter especially in March right so near-term we are looking at uh some challenges uh 48:32 48 minutes, 32 seconds especially for Middle East u of course we are also looking at some alternate options in terms of you know can we can we take some alternate shipping route so 48:41 48 minutes, 41 seconds these are all some of the things we are also evaluating uh but as I mentioned earlier also there are lot of other options we have in terms of you know 48:49 48 minutes, 49 seconds other markets and uh you know the product uh uh strategy as well So uh if you if you take collectively all these things you know that should help us to 48:57 48 minutes, 57 seconds achieve this 8 to 10% growth whatever we have. Thank you. All right. Thank you sir. 49:05 49 minutes, 5 seconds Thanks. Thanks. And uh on this um 70,000 incremental capacity expansion in Pune post phase 2. 49:14 49 minutes, 14 seconds Uh what's the timeline for this? Was it FI30 and the current capacity itself is 49:21 49 minutes, 21 seconds fairly high? So uh again what is the driving factor behind the significant uh capacity expansion beyond phase 2? 49:29 49 minutes, 29 seconds So very simple uh 170,000 phase one already done 80,000 in 2028 will bring 49:36 49 minutes, 36 seconds it to uh 250 and then the balance 70,000 will come between 28 and 30 to bring it to 320 and the driving force is of 49:45 49 minutes, 45 seconds course the addition of more models. So today is only one model then the second model and uh I mean beyond that of course no more no more disclosures for today. 49:56 49 minutes, 56 seconds Great. Thank you so much. That's all from my side. 49:59 49 minutes, 59 seconds Thank you ladies and gentlemen. We'll take that as the last question for today. I now hand over the conference to the management team for closing comments. Over to you. 50:13 50 minutes, 13 seconds Thank you. Thank you. 50:15 50 minutes, 15 seconds Yeah. Yeah. So uh thanks everyone for joining the call. Uh we will wind up this uh meeting now. Thank you so much for your participation. 50:22 50 minutes, 22 seconds Thank you on behalf of Hundai Motor India Limited. That concludes this conference. Thank you for joining us.