Hyundai maintains FY27 growth outlook, banks on new launches and demand recovery

Hyundai Motor India is maintaining its FY27 volume growth and operating margin outlook. The carmaker is betting big on new model launches and stronger demand for ICE vehicles to offset the disruptions that hurt profit in the last quarter that ended in June. Hyundai held its EBITDA margin outlook of 11%-14% for FY27, even though the margin in the first quarter of this financial year dropped to 9.3% from 13.3% recorded in the corresponding quarter of last fiscal.

Hyundai's profit in the first quarter of the current fiscal dropped more than 35% to ₹889 crore. On the other hand, revenue of the auto company fell 0.5% in the same quarter. This drop in profit and revenue was attributed to the higher costs and production disruptions at the automaker's Chennai manufacturing facility.

Speaking on the last quarter performance, Hyundai said that higher raw material costs and weaker exports due to the Middle East conflict weighed on earnings, despite the continuing effect of the GST rate reduction during the festive season last year. Higher steel and commodity prices continued to pressure margins of the OEM despite price hikes during the quarter.

However, the carmaker is banking on the new model cycle slated to start from October, traditional demand surge during the festive season, and high demand for SUVs. The automaker is also expecting the CNG cars to drive growth in the coming months. These expectations come backed by the growing demand for CNG models amid the concerns related to the impact of E20 fuel, high cost of petrol and diesel, etc. Interestingly, CNG models contributed a record 18% to Hyundai's total passenger vehicle sales in the last quarter.

Hyundai Motor India's CEO and MD Tarun Garg said, “The new model cycle starts from October with the mid SUV in the festive season. So that should also help us to improve the volumes." The auto OEM plans to launch a mid-sized SUV in the Creta segment during the upcoming festive season, followed by an electric vehicle in the Venue segment later this fiscal. It is also planning to expand its CNG lineup to six models by 2030 from three currently.

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