The three factors that drove Hyundai’s recovery in India

Hyundai Motor India Ltd expects a steady growth path, with profits rising for the second consecutive quarter on the back of rising rural sales, growing exports and rising sales of high-margin sports utility vehicles (SUVs). The company expects the growth momentum to continue in the March quarter, with the upgraded Venue SUV already receiving over 80,000 bookings.

The Indian arm of the Korean automaker recorded its highest ever sales share from rural areas at 24%, with goods and services tax (GST) cuts supporting sales during the quarter. Exports increased by 21% to 48,888; One in four Hyundai vehicles was sent abroad. As the share of SUVs in its sales increased, Hyundai saw its profits increase by 6% compared to the previous year. ₹1,234 crore, while revenue increased by 8% ₹18,217 crore.

According to Tarun Garg, managing director and chief executive officer, the implementation of GST reforms has brought greater clarity and stability to the indirect tax framework. “This, coupled with interest rate cuts, has significantly improved customers’ purchasing sentiment and brought a renewed wave of optimism,” Garg said in the post-earnings press conference.

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“More importantly, structural shifts in consumer preferences have continued to strengthen further, with increased adoption of SUVs, increased adoption of new technologies and a clear preference for higher value and feature-rich products,” Garg said in the interview, which was his first since taking over as the company’s first Indian MD and CEO on January 1.

Hyundai India suffered four consecutive quarters of losses on an annualized basis between Q2 FY25 and Q1FY26 before getting on the profit path in the September quarter.

peer performance

Hyundai became the second automaker to report earnings after Maruti Suzuki India Ltd., India’s largest automaker. Maruti Suzuki recorded a 4% year-on-year increase in its after-tax profit. ₹3,879 crore due to one-time procurement ₹593 crore due to new labor law. Revenue increased 28% during the quarter ₹50,959 crore after highest ever quarterly sales of 667,769 units.

Hyundai, which lost the title of number 2 automobile manufacturer in sales in 2025 to Mahindra and Mahindra, seems optimistic about growth in the light of policy and market developments. Shares rose 1.54 per cent against a 2.13 per cent rise when Nifty Auto announced results during market hours on Monday.

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“By capitalizing on opportunities in New Venue and exploring new markets, we are confident of sustaining the growth momentum in Q4 and beyond,” Garg said.

Most of the incremental sales growth for Hyundai, which faces intense competition from Mahindra and Tata Motors, comes from exports. In the October-December quarter, sales to international markets increased by only 0.4% to 146,548 units in the domestic market, and increased by 21% to 48,888 units.

In India, Hyundai saw its fuel and product mix remain largely flat compared to last year. The share of SUVs in domestic sales reached 70%, an increase of one point compared to the previous year. Internal combustion vehicles fell from 85% to 83% of sales. While the share of electric vehicles remains at 1%, the company has only two electric vehicle models, Creta Electric and Ioniq 5.

With the proposed emission norms from April 2027 next year, the company says it will steadily increase the penetration of clean fuel vehicles in its portfolio.

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“If you see a CNG mix, the CNG mix in our product line is constantly increasing. In the third quarter, we had 16% CNG penetration, which was the highest quarterly CNG mix ever. In line with that, you know, last year we were hovering around 14-15%. Now we’re at 16%. And it’s actually constantly increasing,” Garg said.

The senior executive added that the company has plans to launch new electric vehicles and other clean fuel vehicles to meet future emission norms.

Other drivers of growth for the company will include increased rural penetration as well as entry into the taxi segment, where it will create a new fleet of vehicles for commercial operations.

Hyundai is aligning its growth with the industry’s forecast of 5-6% volume growth in the next financial year. “We are also committed to this industry growth. So, I think our model mix is well positioned to capture all the opportunities that arise due to the GST cut,” Garg said.

“Another thing we talked about was taxi, and we got a very good response. Of course, it’s only been a month, but the first response is very good. I think this will also help us achieve more volume.”