Hyundai Motor India Limited — Q4 FY25 earnings call

Call held 16 May 2025

Management summary

Hyundai delivered a resilient FY'25 performance navigating macro headwinds while executing strategic milestones including successful IPO and MSCI inclusion. Q4 showed strong sequential recovery with margin expansion and robust profitability. The company is entering an investment phase with Pune plant expansion and aggressive product roadmap, positioning for sustainable long-term growth despite near-term margin pressure from new capacity.

Highlights

  • Successful execution of India's largest IPO with MSCI Index inclusion within 6 months

  • Strong Q4 sequential recovery with EBITDA margin of 14.1% and PAT growth of 39.1%

  • Maintained healthy FY'25 margins with EBITDA at 12.9% despite challenging environment

  • Board recommended dividend of ₹21 per share with 30% payout ratio

  • Aggressive product pipeline: 26 launches by FY'30 (20 ICE, 6 EV)

  • Pune plant production to commence Q3 FY'26 with capacity for ICE and EVs

  • Export guidance of 7-8% growth for FY'26, targeting 30% export share by 2030

  • Strong SUV performance with 69% domestic share and record Q4 SUV sales

  • First Investor Day scheduled for September 2025

Concerns

  • Challenging domestic demand environment

Key financials

2 periods

Q4

  • Revenue from Operations
    ₹17,940.3 Cr
    YoY +1.5%
  • EBITDA
    ₹2,532.7 Cr
    YoY +0.4%
  • PAT
    ₹1,614.3 Cr
    YoY -3.8%
  • Total Sales Volume
    1,91,650 vehicles
    YoY -1.1%

FY25

  • Revenue from Operations
    ₹69,192.9 Cr
    YoY -0.9%
  • EBITDA
    ₹8,953.8 Cr
    YoY -2%
  • PAT
    ₹5,640.2 Cr
    YoY -6.9%
  • Domestic Sales
    5,98,666 vehicles
    YoY -2.6%
  • Export Sales
    1,63,386 vehicles
    YoY +0.1%

What they filed

Q1 FY27: revenue down 1.0%, net profit down 33.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue16,876 16,242 17,562 16,025 17,061 +1%17,453 +7%18,452 +5%15,865 −1%
EBITDA2,138 1,825 2,489 2,135 2,383 +11%1,960 +7%1,915 −23%1,447 −32%
Net profit1,338 1,124 1,583 1,336 1,570 +17%1,195 +6%1,222 −23%883 −34%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Domestic Growth

  • Domestic market performance Domestic Growth · FY'26 · Medium confidence Grow broadly in line with industry
    for domestic, our endeavor is to grow broadly in line with the industry

    — K S Hariharan

Export Growth

  • Export volume growth Export Growth · FY'26 · High confidence 7-8%
    for exports, we are targeting 7% - 8% growth for the financial year'26

    — K S Hariharan

Margin Target

  • EBITDA margin Margin Target · FY'26 · Medium confidence Healthy double-digit
    our aspiration is to maintain healthy double-digit EBITDA margins

    — K S Hariharan

Capex

  • Capital expenditure Capex · FY'26 · High confidence ₹7,000 crores
    We have planned for a capex of around INR7,000 crores in the financial year'26

    — K S Hariharan

Product Pipeline

  • New product launches Product Pipeline · By end FY'30 · High confidence 26 products (20 ICE, 6 EV)
    we will be launching 26 products, which will include a mix of new models, full model changes & product enhancements, by the end of financial year 2030. This will comprise 20 from ICE and 6 from EV segment

    — Unsoo Kim

Production Timeline

  • Pune plant vehicle production Production Timeline · Q3 FY'26 · High confidence Q3 FY'26
    We are gearing up to start vehicle production in this new facility from the third quarter of the financial year 2026

    — Unsoo Kim

Export Share Target

  • Export penetration Export Share Target · By 2030 · High confidence 30%
    by 2030 the export penetration can go up and maybe reach 30%

    — Tarun Garg

Dividend

  • Dividend per share Dividend · FY'25 · High confidence ₹21
    the Board has recommended a dividend of ₹21 per share for the financial year 2025 which translates to a payout ratio of 30%

    — Unsoo Kim

Strategic Event

  • First Investor Day Strategic Event · September 2025 · High confidence September 2025
    HMI will host its First Investor Day in September this year

    — Unsoo Kim

Risks & concerns

  • Challenging domestic demand environment

    high

    SIAM projects only 1-1.5% industry growth for FY'26, with continued macro uncertainties affecting consumer sentiment

    Cautiously optimistic with focus on quality of sales and balanced growth

  • New plant margin pressure during ramp-up

    medium

    Pune plant commissioning in Q3 FY'26 will create near-term margin pressure due to low initial capacity utilization and higher depreciation

    Confident in maintaining healthy margins through operational efficiency

  • Market share pressure amid competitive intensity

    medium

    Industry stress leading to price cuts and rampant discounting, creating market share pressure for companies maintaining pricing discipline

    Prioritizing profitability balance while waiting for new product cycle

  • Global trade and economic uncertainties

    medium

    Ongoing global uncertainties and geopolitical tensions affecting both domestic and export markets

    Leveraging export diversification and market positioning

Q&A highlights

5 direct
Sequential ASP improvement drivers Direct
we have done the price increase in the month of January. Plus, we have also moderated our discount levels in domestic on a sequential basis...our ASP has improved by more than 5% on a sequential basis

Quantifies key margin recovery drivers including 0.6% price increase and discount reduction from 2.6% to 2.0%

Asked by Rishi Vora (Kotak Securities)

Segment outlook and customer preference shift Direct
if you see the micro-SUV segment, which did not exist 3 years back, suddenly that has become a very substantial part of the market. Almost 5.7% of the market was micro-SUV in 2024...it does not appear that there will be a bounce back in this segment

Confirms structural shift from hatchbacks to SUVs with no expected recovery in traditional segments

Asked by Rishi Vora (Kotak Securities)

EV profitability and localization strategy Direct
Today, if you look at Creta EV, if you exclude the launch-related marketing expenses and the test drive discounts, we are margin positive on Creta EV

Confirms EV profitability excluding launch costs, contrasting with industry norm of EV margin pressure

Asked by Binay Singh (Morgan Stanley)

Product pipeline timing and market strategy Direct
Out of these 26 models in the next 5 years, 8 of them will be in the immediate next 2 financial years, starting April'25

Provides specific timeline for near-term product launches to address market share concerns

Asked by Kapil Singh (Nomura)

Export expansion strategy and market potential Direct
we have access to 80+ export markets...Last year, our export portion was 21% which we will increase to 30%...we are very optimistic for the export market

Demonstrates strategic commitment to export growth with clear targets and market expansion plans

Asked by Gunjan Prithyani (Bank of America)

2 min read 5 chapters

Detailed narrative

IPO Success and Capital Market Recognition

Hyundai achieved landmark milestones with India's largest IPO execution and rapid MSCI Index inclusion within 6 months of listing. The company secured inclusion in prestigious indices including NIFTY Next 50 and BSE 500, reinforcing market credibility. Board recommended ₹21 dividend per share with 30% payout ratio, demonstrating shareholder value commitment while formulating comprehensive dividend policy for future transparency.

Strong Q4 Sequential Recovery Despite Annual Headwinds

Q4 delivered robust sequential performance with EBITDA margins expanding to 14.1% and PAT growing 39.1% quarter-over-quarter. Key drivers included 0.6% price increase in January, domestic discount reduction from 2.6% to 2.0%, and favorable product mix. ASP improved over 5% sequentially, demonstrating pricing power despite competitive pressures. However, FY'25 faced macro headwinds with PAT declining 6.9% YoY.

Strategic Capacity Expansion with Pune Plant

Pune plant represents transformative milestone coming 15+ years after Chennai expansion, designed with flexibility for both ICE and EV production. Vehicle production scheduled for Q3 FY'26 with FY'26 capex of ₹7,000 crores (40% for Pune expansion, 25% product-related). Plant incorporates HMC global practices and sustainability features, supporting carbon neutrality vision by 2045. Initial low utilization may create near-term margin pressure.

SUV Leadership and Product Portfolio Transformation

SUV segment reached 69% of domestic sales with record Q4 volumes of 106,182 vehicles. Company surpassed 2.5 million cumulative SUV sales and 1.5 million Creta sales milestones. Creta Electric achieved margin positivity excluding launch costs, supporting EV strategy. Aggressive 26-product pipeline by FY'30 (20 ICE, 6 EV) with 8 launches in next 2 years addresses product cycle concerns.

Export Hub Strategy and Global Expansion

Maintained export volumes at 163,386 units despite global uncertainties including Red Sea crisis and LatAm instability. Export share reached 21% in FY'25 with target of 30% by 2030. Currently serves 80+ markets with expansion into Australia and other advanced markets. Strong performance in Middle East & Africa and new model launches in Indonesia, South Africa, and Nepal support growth trajectory.

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