Hyundai Motor India Q2 FY27 Earnings Call: Record Revenue Up 18.5% YoY, Commodity Costs Hit Margins 400bps

Hyundai Motor India Ltd held its Q2 FY27 earnings call on October 28, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record Top Line, Sharp YoY Margin Compression on Commodities

• Highest-ever quarterly revenue of Rs.2,06,961 million — up 18.5% YoY from Rs.1,74,608 million in Q2 FY 2025-2026; total sales of 2,19,072 units grew 14.7% YoY and 23% QoQ, with domestic volumes up 18.8% YoY to 1,65,772 units.
• EBITDA fell to Rs.19,745 million (9.5% margin) — vs Rs.24,289 million (13.9%) in Q2 FY 2025-2026; EBIT was Rs.14,191 million (6.9%) and PAT Rs.11,962 million (5.7%) vs Rs.15,723 million (8.9%) YoY.
• Commodity costs hit margins by ~400 bps YoY and 250 bps QoQ (IR head KS Hariharan), partially mitigated via localization, value engineering and price hikes taken so far in calendar 2026; sequentially, EBITDA grew 31% and PBT/PAT grew 35%.
• Quality-of-sales metrics improved — domestic discounts declined to 2.8% (per CEO Tarun Garg; segment 3 cites 2.9% vs 3.2% in Q2 FY 2025-2026), ASP improved 2% YoY, and tier-1 localization reached 84% (from 82% in FY 2025-2026).
• Record mix metrics — highest-ever rural contribution at 26.6%, highest-ever CNG share at 19.1% (CNG volumes +48% YoY), and highest-ever Vahan registrations for fleet sales; operations were restored within 22 days after the Q1 FY27 production disruption.

8-10% FY27 Domestic Growth Reaffirmed on Festive Traction

• FY27 guidance reaffirmed: 8-10% domestic sales growth — backed by festive demand, incremental third-shift capacity at Pune, and two new products; management is confident of outpacing the industry in H2 FY27, where it is on track for 8-10% YoY growth vs a tentatively expected ~5-5.5% industry growth.
• Festive season FY 2026-2027 sales up 31% in the Shraddh+Navratri period and up 75% in the Ganesh-Onam period; management cautioned Navratri-only comparisons are unfair as the prior-year Shraddh window saw hardly any sales.
• Waiting periods currently run 2-6 months depending on variant (as of the call); Diwali on November 8 (Q3 FY 2026-2027) is expected to keep traction strong, with December also typically good.
• Rural demand remains strong despite El Nino concerns in media — dealer and sales-consultant feedback indicates no significant impact; rural SUV mix is ~68-69%, similar to urban, and 60% of HMI's new network is in rural areas; management expects rural to continue outpacing urban.
• Management characterized ~5% as the normalized industry CAGR now that the base effect has neutralized (period unspecified).

Golden Product Cycle Begins; EV Mix Targeted at 7-7.5% in FY 2027-2028

• The "Beyond" launch (two days before the call) marks the onset of the "golden product cycle" — demand described as "very strong"; management flagged 250,000 annual units as a conservative target (period unspecified); too early to share booking/backlog numbers (analyst cited media interviews referencing 2,000 orders per day).
• Dedicated ground-up EV launching in Q4 FY 2026-2027 — explicitly not Venue-derived, positioned in the sub-4-meter compact SUV segment and designed specifically for India; management expects Hyundai's EV mix to reach ~7-7.5% in FY 2027-2028, up from ~2% currently in FY 2026-2027 (analyst's figure endorsed by management).
• Industry EV penetration is ~6.4% in FY 2026-2027 — management expects the industry to reach 7-7.5% going forward (period unspecified); localization of key EV components (power electronics, ICCU) is complete ahead of launch; Creta has a provisional PLI compliance certificate with the final one awaited.
• Government representatives, speaking at a conference, indicated EVs should be ~15-17% of passenger vehicles by 2030 — management cited "EVs should be ~15-17% of passenger vehicles by 2030" (some reports cite 10%, the representative suggested 15-16%); management wants Hyundai's EV penetration to exceed that industry level in 2030.
• Green powertrain roadmap: ~50% of the portfolio likely green over the next 4-5 years (i.e., by around FY 2031-2032) — management announced roughly equal contribution (±2%) from CNG, EV and hybrid around 2030-2032; management welcomed the government's CAFE 3 framework and is committed to 50%+ eco-friendly powertrain share over the next 4-5 years.
• Gen-3 Creta: no timeline announced yet — management confirmed the launch will happen but asked for patience.

Geopolitics Dents Original Plans; Double-Digit FY27 Export Growth Still Targeted

• Exports grew 3.7% YoY and 38% QoQ in Q2 FY 2026-2027 — QoQ: Middle East +57%, Mexico +56%, Africa +35%, Latin America +10%; exports were 24% of volumes; the worsening geopolitical situation has impacted original export plans.
• Original FY 2026-2027 export volume growth target was 8-9% (cited by Goldman Sachs' Chandramouli Muthiah, referencing Red Sea and drone incidents at critical airports); KS Hariharan said H1 FY 2026-2027 was challenging but expects high double-digit export growth in H2 FY 2026-2027, with demand intact across markets.
• Q2 FY 2026-2027 export mix: Middle East and Africa combined 52% (Middle East 34%, Africa 18%), Latin America 26%, Mexico 20%; H1 saw strong Latin America and Mexico demand where management pushed additional volumes while the Middle East faced logistical disruptions.
• Product levers: new Venue exports expected to at least double in CY2026 vs CY2025; Exter exports expected to grow at least 50% in FY 2026-2027 vs FY 2025-2026; Bayon exports planned from Q4 FY 2026-2027 with a go-forward target of exporting to 50+ countries (period unspecified).
• Export SUV mix is <20% vs ~70% domestic — management called this a key opportunity and expects the share to keep rising; exports were 24.5% of production in FY 2025-2026 (vs 20% four years earlier), with previously announced intent to reach closer to 30% of production (period unspecified).
• Logistics mitigation — peers have flagged lack of ship/vessel availability (per the analyst); management is exploring alternate routes and different ports in coordination with its logistics partner.

H2 Needs Slightly Above 12% EBITDA to Hit 11% FY27 Guidance

• Management (Tarun Garg) clarified H2 FY 2026-2027 EBITDA margin needs to be slightly above 12% — not the >13% the analyst implied — to reach the 11% EBITDA guidance for FY 2026-2027; the analyst (Pramod Kumar, UBS) had framed the gap against the 9.3% EBITDA reported for Q2 FY 2026-2027.
• Tamil Nadu incentive, effective from the last week of September 2026 — Q3 FY 2026-2027 and Q4 FY 2026-2027 will each carry more than 1% of margin benefit; double-digit export growth is a further H2 tailwind as export margins are much higher than domestic.
• September 2026 price hike averaged 0.4% — cumulative price increases since January total about 1.4% (calendar year 2026, per management's stated basis); the September increase will reflect across the entire H2 FY 2027-2028, and another increase is planned for January 2027 (Q4 FY 2026-2027).
• Chennai plant utilization has declined to less than 80% (Q2 FY 2026-2027) — the EV and Bayon are expected to help lift utilization above 90% (period unspecified); the Venue third shift has started, taking operations much closer to the 170,000-unit third-shift level (period unspecified).
• Q3 FY 2026-2027 raw material basket guided flat to slightly negative sequentially — precious metals trending down while copper is moving up; management cited general consensus that, post the midterm elections, the worst situation may last another three months (into around Q4 FY 2026-2027), after which costs should soften; Q3 commodity outlook not quantified — prices are "highly volatile".
• Steel safeguard duty impact stated as "not much" so far — given heavy steel localization over the last 3 to 4 years; SIAM is discussing the future course of action with the government, and the government routinely takes SIAM feedback ahead of the budget (CEO attended a SIAM meeting last week).

2,50,000 Combined Mid-Size SUV Units Framed as Capacity Planning, Not Commitment

• Creta domestic volumes of ~1,70,000 units expected in FY 2026-2027 (Tarun Garg), responding to decline risk from the ~1,93,000 trailing-12-month base (cited by Nuvama); management cautioned the trailing base includes Oct-Nov sales of the prior year and is not like-for-like.
• Management forecasts ~2,50,000 combined Creta + Bayon units for FY 2026-2027 — explicitly framed as a capacity-planning forecast rather than a commitment; 2,50,000 "looks conservative" with probable upside, contingent on the geopolitical situation, with better quantification expected by Q4 FY 2026-2027.
• Bayon CNG variant planned for January 2027 (Q4 FY 2026-2027) — expected to be another tailwind for Bayon volumes; 50 countries have shown interest in sourcing Bayon from India (~34 in Latin America, ~14-15 in the Middle East, some in Asia Pacific); triple-digit units per country per month is not a fair yardstick ("we would need to make two more plants") and volume potential is premature to quantify, with more clarity expected by end of Q3 FY 2026-2027.
• TVS three-wheeler project on track — Pune plant inauguration completed and concept testing done with good results; launch timelines to be announced at the appropriate time; management declined to confirm an FY 2027-2028 launch, citing multiple parties involved (TVS, HMC).
• HMG commitment: India will remain a key focus market for group investments — the executive chair stated at the Pune plant inauguration that the group will invest in advanced manufacturing, innovation, R&D, and localization; fiscal 27 milestones include 30 years of operations in India, 4 million cumulative exports, and 100,000 vehicles produced at the Pune ramp-up.