Hyundai Motor India Ltd (NSE: HYUNDAI) Q3 2026 Earnings Call dated Feb. 02, 2026
Corporate Participants:
TARUN GARG — CHIEF OPERATING OFFICER
K S Hariharan — HEAD, INVESTOR RELATIONS
Analysts:
Amedar Goude — Analyst
Chandramouli Muthiah — Analyst
Gunjan Prithyani — Analyst
Kapil Singh — Analyst
Amyn Pirani — Analyst
Binay — Analyst
Pramod Kumar — Analyst
Yash Agarwal — Analyst
Janesh Gandhi — Analyst
Presentation:
operator
Good day and welcome to Q3 and 9 months FY26 earnings conference call of Hyundai Motor India Limited. As a reminder, all participant lines will be in the lesson only mode and there will be an opportunity for you to ask questions after the conclusion of presentation and management remarks. I now hand the conference over to Mr. Amedar Goude from Ambit Capital. Thank you. And over to you.
Amedar Goude — Analyst
Thank you. Good afternoon. We welcome you all to the Q3 and 9 month FY26 earnings conference call of Hyundai Motor India Limited. Today we have with us Mr. Tan Garg, Managing Director and Chief Executive Officer. Mr. Wang Do Hoar, Chief Financial Officer. Mr. Gopalakrishnan C.S. chief Manufacturing Officer. Mr. Sarvanan E. Function Head Finance and Mr. K.S. hariran, Head of Investor Relations from Hyundai Motor India Limited I would like to inform you that the call is being recorded. I would now like to invite Mr. K.S. haryan, head of Investor Relations from Hyundai Motor India, over to you, sir.
Thank you. M. Good evening everyone. Welcome to the earnings call for the third quarter and nine months financial year 2526. Before we begin, I want to remind you of the safe harbor we may be making. Some forward looking statements that have to be understood in conjunction with the uncertainties and the risks that the company faces. The conference call will begin with our MD and CEO remarks on the performance and outlook followed by a brief presentation by me on Q3 and 9 months performance. After which we will be happy to receive your questions. Now I am handing over to our MD and CEO Mr.
Tarungar. Over to you, sir.
TARUN GARG — CHIEF OPERATING OFFICER
Thank you, Hari. Good evening everyone and a very happy new year to you all. I hope this year has begun on a positive note for all of us. Before I begin, I’d like to express my sincere gratitude to Hyundai Motor Company as well as to all our shareholders for the trust and confidence they have placed in me by entrusting me with this responsibility of being the first Indian MD and CEO of Hyundai Motor India Limited. I’m both honored and energized to lead HMIL at this crucial juncture. And I look forward to building further on the strong legacy that my predecessors have left behind as we move ahead together.
Reflecting on calendar year 2025, the Indian automobile industry benefited from a series of supportive policy measures by the Indian government that strengthen consumer demand. Sentiments 2025 started with government announcing income tax cuts which acted as a direct catalyst for discretionary consumption. Further, the implementation of GST 2.0 reforms brought greater clarity and stability to the indirect tax framework. This coupled with interest rate cuts, significantly improved consumer buying sentiments and brought in a renewed wave of optimism. Importantly, structural shifts in consumer preferences continue to strengthen with increased adoption of SUVs, growing acceptance of new technologies and a clear preference for higher value and feature rich products.
HMI achieved a significant milestone for our iconic mid size SUV Creta, which recorded its highest ever annual sales of 2 lakh units plus in a calendar year and reclaimed its position as the number one SUV sold in India. This milestone translates to an impressive average of 550 cretas being sold every day, reaffirming the model’s undisputed leadership and enduring popularity in the Indian automotive market. Overall, 2025 provided a constructive and supportive backdrop for the auto industry, creating a strong foundation for sustainable growth. HMI also took a significant step forward by entering the commercial mobility space with the launch of the Prime Taxi range.
Built on Hyundai’s core strengths of trust, reliability, comfort and low cost of ownership, the initial customer response has been extremely solid. This reinforces our confidence in expanding our presence in this fast growing and attractive segment. Moving on to domestic sales performance for the quarter we delivered a healthy sequential volume growth of 5%, clearly reflecting a strong festive LED demand and sustained momentum following the GST reforms. The quarter was further strengthened by the phenomenal response to the newly launched Hyundai venue. Customer interest has been overwhelming, translating into strong bookings of nearly 80,000 units, reinforcing our presence in the compact SUV segment.
Rural markets continue to be a key growth driver for us with sustained focus and targeted initiatives. We achieved our highest ever quarterly rural contribution to domestic sales exceeding 24% while our wholesale performance remained healthy. It was the underlying retail momentum that stood out in this quarter. Retail demand was particularly strong in December, delivering a robust 16% growth year on year. Importantly, with streamlined channel inventory, we have created adequate headroom for stronger wholesale volumes going forward in Q4 of this fiscal over the quarter gone by reflect strong demand momentum, excellent execution and the sustained relevance of our business strategies.
Exports, export continue to play a pivotal role in supporting our overall volume and profitability. During the quarter we delivered a robust year on year growth of 21% driven by sustained demand momentum across key markets. Our major export regions, Middle east and Africa and Latin America recorded robust volume growth of 30% and 13% respectively. Looking ahead, we remain optimistic about the export outlook and see exports as a meaningful growth engine both in volume as well as profitability. We continue to deliver strong operating and financial performance across all matrices including volumes, revenue and profitability. We achieved healthy top line growth of 8% in this quarter.
On a year on year basis, our blended ASP this quarter improved by 5% year on year reflecting our strong sales mix and prudent pricing strategy. Notably, the improvement in ASP was seen both in domestic and exports with a growth of 4% and 8% respectively. Further, we were able to maintain our ASP on Q on Q basis despite the seasonal nature of the quarter and competitive intensity with price wars prevailing in the industry. On the profitability front, we remain firmly committed to our quality of growth strategy. Despite costs associated with capacity stabilization and surge in commodity prices, we successfully maintain margins at levels comparable to last year without compromising on pricing discipline.
Importantly, on a year to date basis, EBITDA margin expanded to 12.8% versus 12.5% last year. This was achieved through better sales mix and cost optimization measures including our localization efforts. This underscores the resilience of our business and our ability to protect profitability while continuing to invest in long term growth outlook. On the domestic front, we are well positioned to drive stronger wholesales in the coming quarters with optimum dealer inventory levels driven by our disciplined approach and favorable GST tailwinds. The momentum is already evident with January recording highest ever monthly domestic sales registering a 9.5% year on year growth alongside highest ever total monthly sales including exports with a robust year on year growth of 11.5% on exports front, While global uncertainties continue to evolve, our focus remains clear.
By leveraging opportunities from the new venue and exploring new markets, we are confident of sustaining growth momentum in quarter four and beyond, complementing the positive outlook on both the domestic and export fronts. Our margin trajectory remains on track as iterated during our investor day. We expect to close fiscal 26 within the guided EBITDA margin range of 11% to 14%. Our continued emphasis on operating efficiencies, disciplined cost management coupled with our quality of growth strategy gives us confidence in delivering healthy double digit EBITDA margins even in the upcoming years. Before I conclude, I’d like to highlight the recent visit of Our Executive Chair Mr.
Isan Jung to India during which he reaffirmed Hyundai’s commitment to pursue a home brand strategy in India anchored in the belief that India will be central to Hyundai’s global growth journey. In line with this long term vision and supported by our strong investment plans in India, we are committed to further strengthening our on ground capabilities, deepening local relevance and capturing the many opportunities that lie ahead. Thank you for your patient listening and now I hand it back to Hari.
K S Hariharan — HEAD, INVESTOR RELATIONS
Thank you sir. During the quarter we witnessed various business highlights as already mentioned by our MD and CEO in his opening remarks. Now I will continue with our sales performance during the quarter. We achieved total sales of 1 95,436 vehicles in Q3 financial year 26 as compared to 1 86,408 vehicles in the corresponding quarter, reporting a growth of 4.8% year on year. In the domestic market we sold 1 46,548 vehicles compared to 1 46,022 vehicles in the same quarter last year. Exports played a pivotal role in overall volumes during the quarter. Our Exports grew by 21.1% year on year driven by strong demand in emerging markets.
Sequentially, domestic volumes grew by 5% driven by the positive impact of GST reforms. Exports contribute a healthy mix of 25% to the overall volumes in Q3 financial year 26 moving to the domestic volume mix for the quarter, SUV segment continued to witness strong momentum led by the successful launch of the all new venue. Hatchback volumes declined on a year on year basis while sedan volumes saw an increase on a sequential basis. All segments recorded growth supported by GST related tailwinds. Turning to the fuel mix, CNG continued to see strong traction contributing 16% to domestic volumes while diesel penetration was at 21% during the quarter.
Now coming to financial highlights for the quarter, our revenue from Operations stood at Rupees 1.79,735 million in Q3 financial year 26 as against Rupees 1.66,480 million in the corresponding quarter. EBITDA stood at Rupees 20,183 million as compared to Rupees 18,755 million in Q3 financial year 25 EBITDA margin was at 11.2% as compared to 11.3% in Q3 financial year 25 Ebit stood at Rupees 14,496 million for the quarter as against Rupees 13,482 million in Q3 financial year 25 ebit margin was stable at 8.1% PAT for the quarter was Rupees 12,344 million as against Rupees 11,607 million in the corresponding quarter with a PAT margin of 6.8% in Q3 financial year 26 as Against 6.9% in Q3 financial year 25.
We delivered healthy year on year performance in both revenue and profitability despite the impact of cost associated with capacity stabilization and surge in commodity prices. For the nine months of current financial year, revenue from Operations stood at Rupees 5,18,472 million as against Rupees 5 12,526 million in the corresponding period. EBITDA stood at Rupees 66,325 million as compared to Rupees 64,211 million in nine months. Financial year 25 EBITDA margin expanded to 12.8% as compared to 12.5% in nine months. Financial year 25 eBIT stood at Rupees 50,181 million for nine months. Financial year 26 as against Rupees 48,462 million in nine months.
Financial year25 EBIT margin improved to 9.7% as compared to 9.5% in nine months. Financial year 25 PAT for the nine months Financial year 26 was Rupees 41,759 million as against Rupees 40,259 million in the corresponding period. We delivered a pat margin of 7.9% as against 7.8% in nine months. Financial year 25 year on year growth across parameters was mainly driven by better sales mix and cost control measures. Turning to profitability drivers for the quarter, profitability was mainly impacted by increase in processing costs associated with capacity stabilization on a sequential basis. Profitability was further impacted by unfavorable mix and increased marketing spends during the quarter.
However, on a year on year basis, through favorable export mix and prudent pricing, we were able to offset the impact and deliver profit growth during the quarter. For the nine months financial year 26 increase in profitability on a year on year was driven by favorable product mix, export mix and cost optimization efforts which helped overcome many headwinds during the period. This concludes my presentation. Thank you all for your time and attention. Now we open the floor for Q and A. Thank you.
Questions and Answers:
operator
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 their Touchstone telephone. 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. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Take a first question from the line of Chandramoli Muthaya from Goldman Sachs. Please go ahead.
Chandramouli Muthiah
Hi, good evening and thank you for taking my questions. I have three questions. The first one is just around the product mix. Suppose the GST cuts. You would have thought that the compact LCV segment should get a reasonably good filip. There seems to Be sort of relatively flattish trend on the exters this quarter versus on the Aura. There’s been meaningful growth both in domestic as well as export markets. So just trying to understand rationale behind that and what’s driving Aura strength, but not so much extra strength yet in this environment. Second question is just around the comments you made around venue.
So venue seems to be doing the domestic market close to about 30,000 units a quarter and you mentioned that you’ve got 80,000 bookings at this stage. And I’m assuming the venue is being manufactured in the new plant. So just want to understand what the current quarterly manufacturing capacity is on the venue and how long it might take to potentially clear out this existing backlog on the venue of orders. And the last question is just around gross margin. So this quarter we understand there’s been a pickup in commodity costs and in your case I think there’s roughly 130 basis points contraction in gross margin versus 2Q.
So if you could just help us understand what part of that is because of raw material pressures, what part of that is because of export mix being lower and what part of that could be because of the venue which might have been launched at an interactive price. Thank you.
TARUN GARG
So I’ll take the first two questions. Like I like you said, the venue response has been fabulous. And as you know Pune plant started operations on 1st of October. We launched the venue on the 4th of November. So last quarter was all about, you know, venue getting into the groove. And in January if you would have seen the venue had recorded the highest ever numbers. So answer to your question, 12,000 almost 400 units were done in venue domestic. So which tells you about the Pune plants production levels. We are evaluating, you know, if we can further increase the production.
So that is being done because the demand, the response has been fabulous on the Aura. Again a very, very good response is coming. And in fact in January 7900 aura has been sold. If you see the average so far has been about 6,000. And suddenly we are seeing the response coming to Aura. GST has a lot to do with it. Plus also as you know on the 1st of January we launched the prime taxi range. I think that is also helping the Aura numbers. So going ahead we believe that Aura will continue to do well and we are looking for opportunities to see if we can further increase the Aura volumes on the exterior.
So you know, just 1/4 of October to December wholesale numbers do not really justify. And let me give you a very because you talked about Q2 versus Q3 and this is for everybody’s benefit. I think we have to understand the underlying nature of seasonality of the Indian market. You know, this is of course my 33rd year in the industry. If you see October to December quarter is all about retails. It is not about wholesales, you know. So if you see, even at an industry level, just to give you numbers, retail for the TIV was almost 15.69 and wholesale was 12.98.
Even for Hyundai retail was 1.71 lakhs and wholesale was 1.46 lakhs. So when you see the profit and you try to see the sequential, I don’t think it is doing justice. That is why year on year is very important, especially for this quarter when all the expenses relating to sales promotion are on retails whereas the profit is limited to the wholesales you do. And everybody tries to minimize their stocks because it is very expensive to sell the 25 stock in 26. So we also did that. We had a great retails in December and that is why we were able to make room and we were able to sell in January a very good wholesales at a very less promotion expenditure as well.
So I think this is inherent and that is why you have to be very careful when you are doing sequential profit analysis. Over to Hari for the other part of the question.
Chandramouli Muthiah
Hi Chandru. Just to give some more clarity on the gross margin front. Year on year, actually our gross margin has improved. This was mainly supported by favorable model and export mix. And also to some extent the price increase which we did last year, January, but sequential. As Mr. Tarun has already explained broadly, this is more of a seasonal nature. We need to consider not just for domestic market, even for export market as well. Because even if you see sequentially the main reasons, one is the commodity inflation which we have been seeing in the recent times and export volumes also have come down sequentially again due to seasonality.
And to some extent I would say there is an unfavorable product mix also. So all these things put together have actually impacted the gross margins on a sequential basis. Commodity, of course, what we try to do, we try to absorb some of the cost pressure. But some costs we have increased as we have done the price increase in January 26th. And we will be continuously monitoring this commodity price trend. We will try to take all the cost optimization efforts to mitigate this impact on the margins as much as possible. Hope I have answered the question.
TARUN GARG
Yeah, yeah. Thanks Darun. Thanks. Thank you very much and all the best.
operator
Thank you. We’ll take our next Question from the line of Gunjan Prithiani from Bank of America. Please go ahead.
Gunjan Prithyani
Yeah, hi. Thanks for taking my question. Just continuing from the prior question, can you just give us a little bit more color on the margin bridge in terms of, you know, if you can specifically call out, you know, the impact of commodity headwind that you really saw in this quarter, what were the new plant startup costs? The reason I’m trying to just get a handle on these numbers is because the new plant startup cost is probably in the base now. And from here on we’ll start to see the revenue realization and venue ramp up as you sort of spoke about.
So a little bit more color on margin bridge in terms of commodity headwind, new plant startup cost and discount.
TARUN GARG
Hi Gunjan. Commodity impact during the quarter was roughly 40 basis points. And then you asked about the new plant cost. So the overall processing cost impact both on a sequential basis as well as year on year, roughly 60 to 70 basis points. That is the impact discounts per se. Actually, we have reduced the discounts sequentially. In Q2, our domestic discount was 3.2% on ASP. And now in Q3 we have already moderated to 2.6%.
Gunjan Prithyani
Got it. And just on the plan startup cost, the 60 to 70 basis point that you all have taken absorbed in this quarter, is it fully in the base or is there is more cost to go in the coming quarters?
TARUN GARG
See, overall, if you see the plant, we have started commencing this operation from October. As such, currently we are. We have seen cost increase in labor overheads and depreciation. Right. And if you look at all these costs, most of the costs are broadly in line with the guidance what we gave earlier. Except that there might be some increase depreciation as we ramp up the capacity and the operations in the near future, there will be some increase in depreciation expected. So broadly speaking, I would say roughly 100 basis points would be the impact from the. From the Pune plant processing cost and which we expect should continue at least for a year period.
Gunjan Prithyani
So it’s a hundred basis point of that 60, 70 is already absorbed in this quarter. That’s the way to think through it. Right?
TARUN GARG
Yeah. Yes, yes, yes. Because the depreciation we expect some increase in the near future.
Gunjan Prithyani
Got it. And this last clarification on margin, I think, is there anything to call out from a venue launch cost which were bunched up in this quarter and may not recover going into the next quarter, Any meaningful number to call out there?
TARUN GARG
Look, there are two issues here. One is, as you know, the Launch cost. Obviously we, as per our principles, the entire launch cost is taken up in that quarter. So which we have done at the same time. You must understand the model life cycle. Whenever a model is launched, obviously it is launched at the lowest level of profit and then it continues to grow because we have then headroom to increase price. Then we are more localization also happens. So this was the first quarter of the venue launch and introductory price was there already. We took some action on the 1st of January by increasing prices.
Going forward we will see the opportunities ahead. So I think we have to see it from that perspective that yes, not only advertising but also from a pricing point of view. The opening or the introductory price is always the lowest. And this is not only for this venue. It has been there for all products across the industry.
Gunjan Prithyani
This is very helpful. Now just again your thoughts on venue because in your opening remarks you did mention that venue will eventually start catering globally as well. Can you give us some color on what is the overall venue sales globally and is it fair to assume that a lot of that now will start coming to India for production? Because the new venue has been launched first in India. So some color on numbers. How big venue can really be outside of India as well?
TARUN GARG
Look, I mean it’s too early to say. Our principles have always been first establish the product in the domestic market and then look at the export markets. We are already started. The old venue was exported to 27 countries. The new venue, I think Chile and other markets we are exploring maybe 30. But it will take time, you know, so we need to be patient. And our first priority of course will be the domestic market as we mentioned, because so many orders have come in, the waiting period is increasing, which we don’t like. We want to really satisfy the customer.
So we are really focusing big time on the domestic market. And slowly, gradually you will see that opportunities of the export markets will also be taken. But initial period, the focus will be on the dominant.
Gunjan Prithyani
Yeah, yeah, got it. This last question that I’m just trying to get your thoughts on. This whole memory chip and RAM prices. I mean they’ve just been a big talking point in the industry. Given we do have a pretty high share of ADAs in our portfolio. Is that something that we should worry about in terms of either the availability or the price going through the roof and affecting the supply chain?
TARUN GARG
Some. Some thoughts around that will help. Gunjan, Generally, if you look at from a supply chain point of view, we have been quite aggressive here in terms of localization. Even if you see during this Quarter, our localization level is already at 84% as compared to 82% on a year, on year basis. Right. So I think there are many components, many high technology parts. We are continuously working for localizing these components. So I think with that we feel that we can definitely manage the supply chain without any hindrance.
Gunjan Prithyani
Thank you so much. I’ll go back to Kir.
operator
Thank you. We’ll take our next question from the line of Kapil Singh from Nomura. Please go ahead.
Kapil Singh
Yeah. Good evening sir, and my best wishes for the CEO role that you have taken. May I know, sir, what would be the top three priorities for you now as we look ahead over the next few years?
TARUN GARG
That’s a tough one. Okay, so as you know, in the investor day, Mr. Jose, our HMC CEO had already laid down a very strong five year plan for us to execute. That plan included of course, our CAGR growth of more than 7% over the next five years, aiming for a market share of 15% plus a 45,000 crore investment. 26 new products, hybrids, EVs, CNG, you know, so they were. So I think my job is of course to make sure that we execute it to perfection. The Pune plant has just started operations, how to stabilize the operations, how to make sure that we can leverage it.
Then of course, then phase two will come in where the capacity will increase to 1.1 million. So I think we need to, because the model cycle is coming up, we have seen what only a new venue has done. So I know that the expectations are high. So we need to prepare well. So we need to really prepare well. And when I say prepare well, I need a preparation internally in terms of our employee capabilities, you know, grooming them for quality and excellence. We need preparation in the network in terms of dealers. We need preparation in terms of our customer satisfaction to take it to the next level.
Quality Pune plant also gives us a lot of opportunity to maybe look at some of the good things, not only good things carried over from the Chennai plant, but some of the good things which we learn in the Pune plant and then make sure that we imbibe them in the Chennai plant as well. So this is, I think one of the main long term issues, long term priorities for me. The second thing in terms of short term, of course, is that there are some opportunities which have come up because of the GST 2.0. How do we leverage these opportunities? How do I make the organization more flexible and more agile? We have already seen, you know, in January the kind of numbers we could get and I think these days it is more about really collaborating and looking at these new opportunities, you know, which we can, which you can, you know, which we can capitalize on.
So I think as CEO, external as well as internal, I like to see how we make the vision of being a home brand in India, how we continue with our CSV activities. How can we really contribute meaningfully to the growth of the economy and the growth of the country. And of course, you know, lead Hyundai to be a smart mobility provider and look for really opportunities and continuously scan the environment for those new opportunities which can, which can come in. Of course, one very big thing which we have is the leveraging the power of the group.
Like for example, you would have heard from Mr. Jose that Hyundai Capital is coming in. How do we leverage those finance opportunities which will come up and the other opportunities as well. So the legacy has already been set. This is our 30th year in India. Now my job is to ensure that, that how the 30 years have been very successful. How in the next five years we prepare for the next 30 years so that they are even more successful and we lead Hyundai second growth phase in India. I hope I’ve answered your question, Kapil.
Kapil Singh
Yeah, thank you, sir. That’s a great answer. Thank you so much. The second question I had was on growth outlook. You know, when we look at the next year, what kind of growth? Just a range, if you are expecting and within that, you know, you had earlier predicted that compact SUVs as a category would probably benefit more. Whereas, you know, some other expectations was that maybe hatches or entry segment cars could benefit more. So I’m hoping you have some data now or ground feedback. So as you look forward, you know, first of all, between the segments, you know, hatches, compact SUVs, large SUVs, how should we look at the growth over the next, let’s say two to three years and overall industry growth and for Hyundai, how to think about growth for next year and is the Hyundai portfolio aligned to this growth outlook?
TARUN GARG
Absolutely. I think if you see the we had the CIM looking ahead conclave where as an industry the consensus was that next fiscal 2627, the growth could be 5 to 6% for the industry. We are well aligned to that as well. Answering your questions on the compact SUV and just let me share with you some interesting data. So January to August 25th, if you see hatches, hatch contribution was 22.4% to the overall industry. September to December it reduced to 21.4%. This is a 1% reduction. And all this was taken by the compact SUVs. Because compact SUVs January to August was 22.1 and September to December it is 23.0.
And mind you, this was a time when venue was changing. So we actually had, we lost some of the sales opportunity. Despite that, this is what has happened to the industry. So very clearly compact SUV with the venue now coming in full force and of course more and more models coming up, more and more facelifts coming up, it seems that this will be a segment which will grow faster. Of course the advantage of GST has been that all segments have started growing. You know earlier the hatches were de growing but now hatches are growing but compact SUVs are growing much faster.
Even mid SUV’s 12.8% contribution, it increased to 13.7% contribution for the TIV January to August 25 versus September to December 25. So you can see that, that the more more growth is coming in SUVs and that is why overall SUV contribution has gone up from 54% in January to August 25 to 56.2% in September to December 25. So very clearly higher growth is coming in SUVs and we are well, well aligned to that. I cannot share with you all the models, but I think we gave you a very good flavor in terms of the 26 models, the segments, etc.
And they are well aligned. And we are well on our way to year wise meeting those numbers which we had promised in terms of the models, derivatives, facelifts, etc. And the power trains which we had promised in the investor day. So we are well aligned to take care of this growth opportunity which seems to be coming our way. And taxi and other segments have really helped us like Aura Sales, like I mentioned 7900 aura sales, frankly speaking would not have been imagined pre in the pre GST era. So this is one to do with taxi and second to do with gst.
So those opportunities also we are not going to miss and capitalize on. Thank you.
Kapil Singh
Thank you.
TARUN GARG
Just lastly on the Kapil, I request.
operator
You to join back the queue please as we have other participants waiting for their time. Thank you ladies and gentlemen. In order to ensure that management is able to answer queries from all participants, kindly restrict your questions to two at a time. You may join back the queue for follow up questions. The next question is from the line of Amin Pirani from JP Morgan. Please go ahead.
Amyn Pirani
Hi and thanks for the opportunity. My first question was on royalty. Could you help us with what Was the royalty rate for or the royalty number for the quarter?
TARUN GARG
I mean the royalty was 2.8%.
Amyn Pirani
2.8%. Okay, thank you. Secondly, for you, Mr. Tarun, you talked about the taxi growth and obviously this is a category which has been growing and you are one of the two players which are doing quite well. Just wanted to understand for our sense of does it matter from a profitability or margin point of view if you sell a vehicle in the personal segment or in the taxi segment?
TARUN GARG
Look, I cannot give you the details but I will say there’s not much of a difference. It’s not much of a difference.
Amyn Pirani
Okay. Okay. So this is also a profitable business segment.
TARUN GARG
Even if it is a profit, it is a profitable segment. Yes.
Amyn Pirani
Okay. Okay. Okay. And lastly, you know, obviously in the investor day you had laid out, you know, a year wise as well as, you know, a product launch pipeline till 2030. Now in fiscal year 27, obviously you know, as per that presentation, we are expecting one new nameplate at least. And maybe it’s early days. But any broad sense as to the timing, like would it come before festive or would it come towards the end of the year? Any broad timeline if you can help us with.
TARUN GARG
No, I mean we stick to the investor day and like I said, we are fully committed to meeting all those promises that I can assure you we are fully on track for that. Beyond that, I would not like to give any further guidance.
Amyn Pirani
Sure, no problem sir. All the best. And I’ll come back in the queue.
TARUN GARG
Thank you.
operator
Thank you. Next question is from the line of Binay Singh from Morgan Stanley. Please go ahead.
Binay
Hi team. Thanks for the opportunity. My first question is on capacity utilization. You know, Hyundai has always had very high utilization rate of capacity. Now obviously it has come off with the new plant coming up. How do you see that? Like how do you see. When do you see Hyundai going back to that 90% kind of utilization rate? Because I assume as you hit there a lot of the cost that we’ve talked about will get absorbed by then.
TARUN GARG
See if you look at now the Pune plant, we have started in October already we are having, we are running two shift operations and we are having more than 90% utilization rate. Of course, Chennai capacity utilization has come down a bit because we have shifted venue to this new plant. See the thing is that one is the existing models. We are continuously working to improve the volumes already January numbers we have discussed. So this will be a continuous process. Second thing, when the new models start filling our product portfolio, I think that should also strongly support Us to improve the capacity utilization at a healthy level.
Binay
Thanks for that Hari. Then the point that you made hundred basis point of hit coming from the plune plant ramp up, remaining there for a year. Is that also linked to that? That in a way you guys are saying that in a year, in the next one year new plan, new models will come up. So utilization rate will go up. If that is why you said one year time frame for that cost to continue.
TARUN GARG
No, see the whatever is the margin impact which I mentioned is basically to do with the overall operating leverage how we can cover the fixed cost impact from the from the Pune plant. And also because Chennai capacity utilization is also down now. So there also my processing cost is actually increased.
Binay
Right?
TARUN GARG
So together if you. If you have to see in total for me to recover the total cost whatever I’m incurring from this new facility, I need to increase my volumes both in Chennai. Of course Pune is doing well already with venue and that is not a major challenge for me. But mainly for Chennai. If you look at, you know, my existing models will start giving me additional volumes with all my efforts we are making including the taxi segment as well. Plus of course the new models once it start coming. We have not announced the new models where it will come, Chennai or Pune.
But hopefully these new models, wherever it comes, it will support me at a total level. Yeah, hope it is. It is clear.
Binay
And is 100 basis point hit lasting for a year. Does it also include the second ramp up in Pune plant for you to go up to 1.1 million? Because that will also be another layer of cost increase, right? So does this include that that you guys in your calculation of, you know, incremental volume versus cost you sort of believe this sort of balances are out?
TARUN GARG
No? As of now the figure indicated it is mainly for the phase one capacity only. Phase two still we are some time away. So I think we can discuss that a little later only. But generally at a broader level. Again if you understand, normally for the initial capacity expansion generally calls for huge Capex investments, right? But the second phase ideally shouldn’t incur that much of a Capex is a broader understanding. But anyway as I mentioned, we are still some time away. We will come to know the details in due course of time. Time and any timeline on phase two. When are we planning to ramp that up?
Binay
The 28th? 2020, 28. Okay. Calendar. And lastly team, just on Mexico, it is an important market for us. We know about the tariff increase. If you could talk a little bit about, you know, interplay of Price increase, demand post the tariff. I. How has that played out? That’s it. Thank you.
TARUN GARG
If you see, export has been pretty good for us in the recent times. Especially for the last one year or so. Even during this year beginning, we gave a guidance of 7 to 8% growth for this fiscal year. But already we are at 18% growth for the nine months period. The momentum is pretty strong, I think for the emerging markets. Wherever we are supplying, we are continuously seeing a strong demand for the product. So the growth momentum should continue is what we understand. See all these tariff issues. If you take Mexico or even South Africa, there is some news, right? So all these things we are, we are evaluating.
But if you see our broader strategy, what we are trying to do is we are continuously exploring opportunities in new, new markets, you know, in order to overall de risk our export operations. This is, this is a broader strategy. I think that should definitely help us on the export front.
Binay
Great. Thanks team. Best wishes for future quarter.
operator
Next question is from the line of Pramod Kumar from UBS Securities. Please go ahead.
Pramod Kumar
Yeah, thanks for the opportunity.
TARUN GARG
Can you use your handset mode please? Pramod, your audio is not very clear.
Pramod Kumar
Is it better now?
TARUN GARG
Yes, please go ahead.
Pramod Kumar
Yeah, can you hear me now?
TARUN GARG
Yes, please go ahead.
Pramod Kumar
Hello. Yeah. Yeah, thank you. Sir, wanted to understand your thoughts on Creta because the. That’s the key model for us. A big profit center. And given when costs are rising up for us and we’re going to be operating a new plant under low utilization and costs are going to be the higher. And the fact that the segment is seeing intense competition with multiple launches. So we just want to understand your thoughts between now and when the new Creta comes in. How are you? How much is the confidence on sustaining Creta without any discount? Sir, because that model has been a standout since launches, has not been on discount, which is a, which is a record in itself.
But just want to understand for the next few quarters, deliver the new model. What are your. What is your strategy going to be to keep it away from discounts?
TARUN GARG
I’ve been answering this question now for three years. Whenever new competition comes in, everybody asks what will happen to Creta. We already shared. Hari already shared that last year was the best ever for CRETA. 200,000 plus units. Number one SUV January, where all the new models, so called new models have been launched. Again close to 18,000 numbers. Look, I cannot predict the future. But what I can tell you is that we have been able to manage Krita because we never sit, you know, like this. We always create. Like for example we had the Night edition.
It has achieved some great response. So we keep on making small changes. We keep on creating the excitement for the customer. Now Creta has always been on waiting period, you know. So I think this was a great opportunity. Last three, four, five months in the rural areas we have started a major thrust on Creta. So we don’t want to get into discount mode or something. I think Krita has a very strong brand and as long as we can utilize and leverage the huge brand equity, the network, the customers, so many customers who take Krita to Krita.
I think we are fairly confident for the creator numbers. But if you want that quarter by quarter, how many creators I will sell, I think it is very, very difficult for me to. But we also understand that Krita is very important and like we have been doing over the past so many years with all the competition coming in, we will continue to do those efforts as well as more to sustain the Creda numbers. Thank you.
Pramod Kumar
I was talking more about the keeping it away from discounting, sir. And then and sustaining this record what you have built with the brand till the new Creda comes in.
TARUN GARG
Look, future guidance, I can tell you future guidance on discounts is very difficult to give. But I can, you know, but whatever steps we are doing helps us to really prevent us from really going into discounts and all. I think the network leverage and brand equity is very strong and we want to leverage on that. Another thing I want to tell you is now ICC cricket is happening T20. Now Creta is a key model there. So you will see across the stadiums Krita being displayed. You know, already in the showrooms you can see the material being sent and the contests around the Creta.
Our own dealer, teams, customers. So I think we are doing various steps to ensure that Creta remains the flag bearer for Hyundai both in terms of volume and profit.
Pramod Kumar
Okay, thanks a lot for that. And second question is on the export outlook, sir, because you talked about the next year industry growth number, what you’re looking at as SIAM and as a company. But any thoughts on the export market in terms of what the growth could look like there? For FY27?
TARUN GARG
Pramod we have maybe for FY27 we have not given the guidance. Maybe we’ll give it in some time. But FY26, as I already mentioned, it is pretty solid numbers we have seen and even in Q4 we expect this momentum should continue.
Pramod Kumar
Okay, fair enough. Thanks a lot. Best of luck.
operator
Thank you. Next question is from Raghunathan NL from Nuama. Please go ahead.
Kapil Singh
Thank you very much sir. And congratulations on the strong response of venue. Sir, my first question was on the commodity inflation part. Can you indicate that what is the kind of increase expected in Q4 and based on that how much has been the blended price hike and what are the under recovery? And also if you can talk about, you know, whether you hedge your commodities, what is the policy there?
TARUN GARG
Raghu, Hari, here, commodity. As I already called out in Q3, the impact was roughly 40 basis points on the margins. And Q4. See, what we are seeing is we are seeing continuous volatility in some of the commodities, especially the precious metals, right? I think one day it is decreasing. One day we are seeing some increase. So we are continuously monitoring the price trends. We don’t do hedging, but generally we try to manage this commodity exposure through other strategies. Like we have some long term supplier contracts. We engage in diversified sourcing strategies. So these are all some of the measures we take to manage this commodity impact.
And we also try to reduce the impact as much as possible through the other efforts. Like for example the cost optimization efforts which we discussed, like localization, value engineering. These efforts continue to help us in terms of cost optimization as far as price increase is concerned. As I already mentioned, we have already announced the price increase we’ve implemented in January. That was nearly 60 basis points. We have done the price increase that was largely for venue. So going forward we will, as I mentioned, we will continuously monitor the price trends on the commodity front and we will take the necessary actions.
operator
Thank you. Thank you. Hareem, can you also indicate how much was the labor code impact in employee cost this quarter?
TARUN GARG
Raghu, if you see, we have also disclosed in the financials as well. What we have done is in the last few years we have proactively changed our policies and compensation structures to a larger extent which is more or less aligned with the emerging labor code requirements. So whatever was the financial impact, we have already recognized in the financials then and there. So today if you look at the based on the latest guidance, we have assessed this impact which came out to be very, very minimal. And we have reflected in the Q3 financials as well. Going forward, we will anyway look at the final rules from the state and central rules in this regard.
If at all, any additional impact will come. We will also recognize in the books of accounts.
Kapil Singh
Understood. And can you also share that, you know, at the end of Q3, given that the channel inventory had gone down, how much would have been the inventory days in the channel that is the end of December.
TARUN GARG
End of December, the inventory was two to three weeks. So even now inventory is less than four weeks. So we had a very good retails in January. Normally at the end of January inventory goes up to five weeks. But we are working on less than four weeks inventory. So these are good signs for the future. But we have to see how the momentum continues going forward.
Kapil Singh
Yeah, got it, sir. Thank you. Thank you so much.
operator
Thank you. Next question is from the line Mukesh Sara from Aventus park, please go ahead.
Amyn Pirani
Yeah, good evening and thank you for the opportunity.
TARUN GARG
My first question is with regards to the industry. I think last quarter you mentioned that there is a lot of upgrades that’s.
Amyn Pirani
Happening even say within the model.
TARUN GARG
The higher end variants are seeing a lot of demand. So now that it’s been about three.
Amedar Goude
Four months since the GST cut, if you could give some sense on how.
TARUN GARG
This has played out maybe for you. And in terms of variant mix, have.
Amyn Pirani
You kind of seen any material shift there within CMR?
TARUN GARG
I already gave this thing about how SUVs and all now on the variant level it is very difficult. ASP trends already Hari has given that on a year, on year basis how ASP moved up by 5% or so. We gave you domestic as well as export separately as well. Now beyond that it is very difficult to give you how variants are moving. Okay. But we are tracking the ASP and. But nothing material to call out.
Amyn Pirani
So basically nothing material as such to. Call out over the last say, quarter. Yeah, yeah, got it, got it. And.
TARUN GARG
I think one of the answers you had mentioned about the industry growth of 5, 6% expected in F27. Any additional color you can provide with.
Amyn Pirani
Respect to what growth is hatchback expected within this 5, 6% and SUVs very difficult.
TARUN GARG
You know, things are very changing. I think if we want a higher growth, first thing we need to do is not to set a target. You know, we have to be flexible. And I think when we are flexible, we will definitely end up with higher numbers. So let’s see how things progress. And I think all of us are gearing up for, for that, you know. So right now very difficult to say how much will we hatch, how much will we see?
Amyn Pirani
Yeah, thank you. Okay. Okay.
TARUN GARG
And just lastly, any Update on the. Cafe3 Norms that we have had say with, on discussions with the ministry, etc.
Amyn Pirani
No, we also waiting. We’re also waiting for the final norms to come in. No, no, additional update after the draft. Yeah, thank you.
TARUN GARG
All right, thank you, thank you so much. I Guess.
operator
We’Ll take our next question from the line of Yash Agarwal from Nirmal Bank Securities. Please go ahead.
Yash Agarwal
Thank you for the opportunity. I just wanted to know, like in the domestic portfolio, SUV mix is around 70% while in export it’s on the lower side. Is there a trend where we are seeing the SUV penetration increasing in the export portfolio as well?
TARUN GARG
I think this is an opportunity very well pointed out by you. We already mentioned that the new venue, the new venue India will be the sole supplier of new venue going forward also. So this is an opportunity. Then next. Right now we don’t have RSD going forward. You know, we will look at the LSD option. Sorry, we don’t have LSD going forward, we’ll look at the LSD option. So I think you will see that the mix shifting in favor of SUV is also going forward. We are looking at some of the opportunities in Alcazar as well.
So let’s see how things progress. But you’re right, as of now the focus has been on the sedan, Varna and the Ora and of course the Hatch like Nios. But I think now we are seeing green shoots in the SUVs which we like to definitely leverage with the venue and the Xtra especially and of course with the other models as well. And also the new models that we are going to come of course mostly will be SUVs. So we will look at all those opportunities also, you know, wherever we can do for exports.
Yash Agarwal
And the second question is on the India EU FTA deal with its face reduction in the import duty, how will it impact our Genesis plan for portfolio expansion in India?
TARUN GARG
India, if you FTA is only five days old and still we have to get all the details, etc. I think it’s too early to. I think we still have to get the details of the ft and we are, as far as Genesis is concerned, it’s a very strong brand globally and we are very confident and will be very well prepared, you know, to as and when we launch the Genesis. But I think it’s too early to comment on how will the FTA affect the Genesis. Both are very, very hypothetical. So please bear with us. At the right time we’ll announce our Genesis strategy and the future plan as well.
Thank you.
Yash Agarwal
Thank you sir. And all the best for your future.
TARUN GARG
Thank you.
operator
Next question is from Janesh Gandhi from Oakland Capital. Please go ahead.
Janesh Gandhi
Yeah. Hi. Am I audible?
TARUN GARG
Yes. Please go ahead.
Janesh Gandhi
Yeah. Hi, Mr. Kuran, my question is again on the EU FDA, given that Europe is one of the important markets which is getting currency served from Indonesia for products like Creta. Do you think there is a case to be made of duties on exports of cars from India to EU reduce this to zero. Is there a case for India to eventually be production up for Europe for some of these models which are made in India?
TARUN GARG
Look, we are awaiting the details, prima facie it appears to be an opportunity. But until we get, you know, the details of what is, what is there, I mean, it’s very difficult to comment. So let’s, let’s please bear with us and as and when we get more details, we will talk about our strategy. We’ve already mentioned that we have a very strong production ecosystem in India and we would like to really increase the export from India going ahead as well. Eventually by 2030 we have to take the export penetration contribution to 30%. So I think all these FTAs are presenting new opportunities.
But we still have to study in detail, you know, because what it means, what kind of changes will have to be done in our product, what kind of regulations are going to be there, whether it’s going to be like for example, currently FTA mentions that maybe EVs will not be a part in the first few years. So I think all those details will have to be seen and what are the opportunities? But we will definitely like to utilize those opportunities to export vehicles to Europe as well from India. But it is too early to comment on that at this stage.
Thank you.
Janesh Gandhi
Sure. Any sense of what would be of the total exports today from India? How much would be going to Europe currently?
TARUN GARG
No, nothing, nothing. We already. We are not exporting to Europe. We are the hub for the emerging markets, Middle East, Africa, Latin America, Asia, etc. We are not exporting to Europe currently. Got it. Thank you.
Janesh Gandhi
Great sir, thanks. And all the best.
operator
Thank you. Ladies and gentlemen. That was the last question for today. With this we conclude today’s conference call. On behalf of Hyundai Motor India Limited, we thank you for joining us. And you may now disconnect your lines.