Conference Call Analysis

        ## Executive Summary
        ===SUMMARY_START===

The Hyundai Motor India Limited Q2 and H1 FY'26 earnings call highlighted a period of mixed performance. Domestic sales saw a slight decline YoY but improved sequentially, driven by GST reforms and festive demand. Exports showed strong growth, particularly in the Middle East & Africa and Mexico. The company achieved a high SUV sales penetration and record rural sales contribution. Margins remained strong due to favorable product and export mix and cost optimization. The Pune plant expansion is expected to impact profitability in the near term. The launch of the new Venue is anticipated to boost growth. Management expressed optimism about future growth, leveraging GST benefits, product launches, and market opportunities. The call also covered topics such as material costs, localization efforts, and the company's strategy for EVs and hybrids. ===SUMMARY_END===

===MARKDOWN_START===

Hyundai Motor India Limited - Q2 & H1 FY'26 Earnings Call Analysis

        ## Detailed Analysis
        **Date:** October 30, 2025

Period Covered: Q2 & H1 FY'26 (Hyundai Motor India's Fiscal Year)

This report analyzes the Hyundai Motor India Limited (HMI) earnings conference call, focusing on key performance indicators (KPIs) and strategic initiatives.

1. Operational Highlights:

• Vehicle Sales Volumes (Wholesale & Retail):
  • Total Sales (Q2 FY26): 190,921 vehicles (vs. 191,939 in Q2 FY25) - Slight decrease YoY.
  • Domestic Sales (Q2 FY26): 139,521 vehicles (vs. 149,639 in Q2 FY25) - Decrease YoY.
  • Export Sales (Q2 FY26): Increased by 21.5% YoY, driven by emerging markets.
  • Festive Season Retail Growth: 23% overall. Hatchback: 16%, Sedan: 47%, SUV: 21%, Exter + Venue: 28%.
  • September + October Retail Growth (vs. Jan-Aug): 21% overall. Hatchback: 24%, Sedan: 14%, SUV: 21%, Exter + Venue: 27%.
• Production Volumes and Capacity Utilization:
  • Vehicle production commenced at the Pune plant on October 1st.
  • No specific capacity utilization rates were disclosed, but incremental costs from the Pune plant are expected to impact near-term profitability.
• Market Share:
  • Experienced some dip in market share, attributed to Venue model changeover.
  • Expects to regain growth momentum starting November with the new Venue launch.
• Channel Inventory Levels (in days):
  • Channel inventory decreased to 3-3.5 weeks (including transit) from a previous level of approximately 5 weeks.

2. Financial Performance:

• Revenue:
  • Q2 FY26: ₹174,608 Million (vs. ₹172,604 Million in Q2 FY25) - Slight increase YoY.
• EBITDA:
  • Q2 FY26: ₹24,289 Million (vs. ₹22,053 Million in Q2 FY25) - Increase YoY.
• EBITDA Margin:
  • Q2 FY26: 13.9% (vs. 12.8% in Q2 FY25) - Improvement YoY.
• EBIT:
  • Q2 FY26: ₹19,114 Million (vs. ₹16,868 Million in Q2 FY25) - Increase YoY.
• EBIT Margin:
  • Q2 FY26: 10.9% (vs. 9.8% in Q2 FY25) - Improvement YoY.
• PAT:
  • Q2 FY26: ₹15,723 Million (vs. ₹13,755 Million in Q2 FY25) - Increase YoY.
• PAT Margin:
  • Q2 FY26: 8.9% (vs. 7.9% in Q2 FY25) - Improvement YoY.
• Average Realization per Vehicle: Not explicitly stated, but can be inferred to have increased due to favorable product mix (SUV penetration) and controlled discounting.
• EBITDA per Vehicle: Not explicitly stated, but can be inferred to have increased due to higher EBITDA margin and relatively stable sales volumes.

3. Strategic & Segment Analysis:

• EV vs. ICE Mix:
  • No specific EV sales volumes were provided for the quarter.
  • Management reiterated its commitment to EVs, with a dedicated EV launch planned for calendar year 2027.
• Domestic vs. Export Mix:
  • Exports played a crucial role in sustaining overall volumes, growing by 21.5% YoY.
  • Strong demand in Middle East & Africa (35% growth) and Mexico (11% growth).
• Raw Material Impact:
  • Experienced pressure in some commodity costs.
  • Cost optimization efforts through localization and value engineering helped mitigate the impact.
  • Expects some continued pressure on commodity costs but will continue mitigation efforts.
• SUV Penetration: Domestic SUV sales penetration at 71%, the highest ever.
• Rural Sales Contribution: Reached a record high of nearly 24%.
• Fuel Mix: Diesel accounts for 23% of volumes, while CNG contributes 15%.
• Royalty: Royalty was 2.8% for the quarter.
• Localization: Localization level stands at around 82%, aiming to reach 90% by FY'30, focusing on high-technology parts.

4. Guidance, Outlook & Targets:

• Management Commentary:
  • Optimistic about industry growth due to GST reforms and festive demand.
  • Expects the new Venue launch to be a catalyst for growth in the compact SUV segment.
  • Committed to maintaining a balance between volume and profit.
  • Monitoring the Nexperia e-component issue and working with vendor partners to mitigate any potential impact on production.

Metric	Target Value	Timeframe
Localization	90%	FY'30