Hyundai Motor Company

Ladies and gentlemen, good day and welcome to the Q4 and FY25 earnings conference call of Funtime Motor India Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the conclusion of presentation and management remarks. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rishi Vohra from Kodak Securities. Thank you and over to you.

Thank you. Good evening and we welcome you all to the Q4 and FY25 earnings call of Hyundai Motors India Limited. Today we have with us Mr. Unsu Kim, Managing Director, Mr. Tarun Garg, Chief Operating Officer, Mr. Vangdu Hoor, Chief Financial Officer, Mr. Gopalakrishnan CS, Chief Manufacturing Officer, Mr. Sarvananti, Function Head Finance and Mr. K.S. Hariharan, Head of Investor Relations from Hyundai Motor India Limited. I would like to inform you that the call is being recorded and the audio call and the transcript will be available at the company's website. I would now like to invite Mr. K.S. Hariharan, Head of Investor Relations from Hyundai Motor India Limited. Over to you, Mr. Hari. Thank you, Rishi. Good evening, everyone and welcome to the Q4 Financial Year 25 earnings call. Before we begin, I want to remind you of the safe harbor. We may be making some forward listening 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 remarks on the performance and outlook, followed by a brief presentation by me on our fourth quarter and annual results for the financial year 25, after which we will be happy to receive your questions. Now, I hand over to our MD. Over to you, sir.

Thank you, Hari. Good evening and welcome to the fourth quarter and the financial year 2025 earnings conference call. In financial year 2025, Chememoral India scaled new heights, achieving remarkable milestones. During the year, the company successfully executed India's largest ever IPO, a historic achievement. FAB stands as a testament to Hyundai's legacy of excellence and its deep-rooted commitment to the Indian market, paving the way for the next chapter of HMIL's growth story. The company remains firmly committed to delivering sustained value and long-term returns to our shareholders. Within just six months of being received, the company secured inclusion in the Morgan Stanley Capital International Index. In the recent MSCI visit, which took place in February 2025, HMIL was the only large cap from India to be included in this global index. by becoming part of the prestigious Indian capital market indices such as Nifty, Next50, DSE500 and other indices in March 2025. We have 45 HMI hours of spending in the Indian stock exchanges, reinforcing its market presence and credibility. Financially, 2025 was a challenging and transformative year for the Indian automotive industry. The overall environment remained tough with a combination of macroeconomic uncertainties impacting consumer sentiment and the purchasing decision. On top of that, we were up against a high base from the previous years, which further amplified the impact. Despite these headwinds, HMIL mitigated the turbulence with agility with our quality of growth strategy solidifying its position further in India. Our first hire SUV lineup grew stronger driven by growing customer preferences and continued product enhancement. The launch of bold new Hyundai Alcazar and the introduction of cut electric Our first intentionally developed EV further strengthened our position in the segment. The fact that two out of every third vehicles sold by us in India is an SUV is a testament to our deep understanding of Indian customers and our commitment to delivering innovation, style and safety. HMIL further set industry benchmarks by surpassing the milestone of 2.5 million SUV sales and 1.5 million credit sales cumulatively since inception, including domestic and exports. The doubling of ADA's variant contribution and increasing popularity of sunroof equipment models reflects the rising aspiration of our customers and the success of our premiumization strategy. During the year, HMIL marked a significant milestone by completing 25 years of export from India, reaffirming its position as the country's largest exporter of passenger vehicles terminatively till date. The financial year of 2025 was marked by global uncertainties, including the Red Sea crisis in Middle East and the geopolitical instability in Latin America. Despite these headwinds, our agile and strategic decision-making enabled us to sustain export volume during the year. Turning to the margins, the market conditions were undeniably tough. Yet we were able to exceed the financial year 2025 on a strong note with an EBITDA of nearly 13%, clocking in another year of healthy margins. This was made possible through optimized operations, disciplined cost management, and a relentless focus on value creation. The company is in a pivotal phase backed by aggressive strategies and the lowest investment plan in India over the next few years, particularly focusing on scaling up production capacity, accelerating our presence in the Indian market and strengthening local manufacturing capabilities. The financial year 2026 will mark a significant milestone in our growth journey with the commencement of our third plant in Paligaon coming in after more than 15 years since the establishment of our second plant in Chiang Mai. The Pune plant is being developed as a modern manufacturing hub incorporating advanced global practices from our current company. Designed with flexibility in its core, The facility will be capable of producing both internal combustion engine and electric vehicles, enabling us to respond dynamically to market demand. Mirroring our Chennai plan's focus on sustainability, the Pune plan is also expected to integrate energy-efficient technologies aimed to reducing our carbon footprint. in alignment with Hyundai's global commitment to achieve carbon neutrality by 2045. We are gearing up to start the vehicle production in this new facility from the third quarter of financial year 2026. In parallel, while our dedicated localization team continues to enhance our localization efforts at Chennai plant, We also intend to deepen our localised supplier network by adapting our indigenisation strategy at the Pune plant, further reinforce our making India vision. With the increased capacity coming in from Pune plant, we will have additional heavy room for expansion in both domestic and export markets. The emerging markets have a significant demand potential and HMIL serves as a manufacturing hub for those markets. Aiming to become Hyundai's largest export hub outside South Korea, we aspire to continue our growth trajectory in export in the coming years. Aligned with our global vision of progress for humanity, Our desire to serve global customers with a wide range of smart mobility solutions will continue to grow stronger. Exports have gained strong momentum in the recent months, and we aim to sustain this trajectory going forward. We anticipate the growth in extra volume to be around 7-8%, supported by robust demand for our products in the emerging markets. The demand environment in domestic market continues to be challenging, but we remain optimistic in our strong fundamentals, which enables us to strategically pursue opportunities as can drive both growth and profitability. While the recent rate cut by RDI and income tax relief by government should support the demand sentiments, we remain cautiously optimistic on the backdrop of global trade and economic uncertainties. With the growing aspiration of customers, we believe SUV will continue to dominate the passenger vehicle segment and going forward. We will continue to focus on increasing our SUV contribution and premiumization. Our rural contribution has seen consistent growth and we are continuously strengthen our rural presence in high potential locations, both from sales and service perspective. We are set to accelerate our presence in the EV market, building on a strong foundation laid in the financial year 2025 with the launch of Crest Electric. This model has received an increasing response from the customers, leveraging the trusted legacy and the strong market presence over the credit ice model. For financial year 26, our endeavor is to grow broadly in line with industry, driven by our strong SUVization and premiumization strategy, along with a focus on rural markets, among others. While the near-term market sentiment appears subdued, we remain confident in the underlying potential of the industry and expect a rebound in the near future. HMIL is gearing up with aggressive product strategy coupled with capacity expansion while also extending its footprint across the country. We shall continue to march forward with a focus on customer delight, offering products that are future-ready, future-rich, and engineered for India. We remain steadfast in expanding well-branded portfolios across ice and eco-friendly technologies to cater to diverse customer needs across segments. In addition to ongoing products, interventions and updates, we are excited to announce that we will be launching 26 products. This will include a mix of new models, full model changes and product enhancements by the end of financial year 2030. This will comprise 20 from ICE and 6 from EV segment. Additionally, we shall be introducing new eco-friendly products like hybrids. These aggressive and strategic launch plans demonstrate our strong commitment to innovation, market responsiveness, and delivering sustained value to our customers. To conclude, we remain optimistic about the road ahead and are confident in our ability to strengthen our position in the market. With a sharp focus on quality-driven growth strategy, we are committed to delivering a sustainable performance, laying a strong foundation to regain momentum and reinforce our leadership in the industry. I am happy to share that the Board has recommended a dividend of 21 rupee per share for the financial year 2025, which translates to a payout ratio of 30%. We are also in the process of formulating dividend payout policy aimed at enhancing transparency and delivering consistent value to our shareholders. We look forward to sharing the details in the near future. Lastly, we are pleased to announce that HMIL will host its first investor day in September this year, covering near to long-term growth strategy, further details on upcoming product launches, and other key initiatives will be shared during the events. Thank you for listening.

now i hand over to harry thank you sir so let me now begin with the key business highlights financially 25 has emerged as a truly defining year for hindi in india one that reflects the strength of our vision by underscoring our strong market positioning with the strategic foresight we continue to witness strong traction in the svv segment which now accounts for 69 percent of our domestic sales volumes thereby reaffirming our deep understanding of the evolving needs and aspirations of Indian customers across rural and urban markets. With the launch of Creta Electric and Alcazar facelift, HMI further reinforced this position in the ACV segment. At HMI, we are committed to delivering superior customer experience by introducing innovative and value-enhancing features. The presence of 6.75 lakh connected cars on the roads since 2019, along with the growing adoption of ADAS at 14% and Sunroof at 53% for the financially identified, underscores the strength of our quality of sales strategy. A newly launched Creta Electric has been receiving good customer response, particularly for its long-range and high-end variants, further affirming the market's preference for Hyundai's premium offerings. The introduction of dual-cylinder technology significantly enhanced our P&G penetration during the year, reaching 13% in financial year 2025. Additionally, the launch of our first locally manufactured mass-market EV bolstered our position towards the electrification journey. HMI's localization efforts are deeply in sync with government's Make in India drive, and our localization strategy strives to constantly leverage India's rich resources, skilled workforce, and advanced engineering prowess to develop world-class technology domestically. As part of this commitment, we have successfully localized over 1,200 components in the last five years to strengthen our supply chain ecosystem. We are proud to mark 25 years of our export journey a significant milestone that reflects HMI's growing global preference and strategic expansion across key emerging markets. HMI also continues to hold the number one position as India's leading passenger vehicle exporter on a cumulative basis. Key export milestones during the year include the launch of Xter in South Africa, Creta Electric in Nepal and recognition of Xter as the bargain of the year 2024. Moving on to the sales performance for the quarter, We achieved total sales of 1,91,650 vehicles in Q4 financial year 25 compared to 1,93,717 vehicles in the same period last year. In the domestic market, we sold 1,53,550 vehicles compared to 1,50,317 vehicles in the same period last year. The moderation in domestic volumes was due to the softness in overall demand sentiment. However, HMI focused on quality of safe strategy to navigate the challenging environment. During the quarter, our exports grew by 14.1% to 38,100 vehicles as compared to 33,400 vehicles in the same quarter last year. Our agile market response enabled us to realign efforts towards regions with stronger demand dynamics, contributing meaningfully to the overall export momentum. Coming to the annual sales performance, HMI achieved domestic sales volume of 5,98,666 vehicles in financial year 25 as compared to 6,14,721 vehicles in financial year 24. Volumes during the year were impacted due to the high base of last year and demand model in urban markets owing to the overall macroeconomic conditions. On exports, we could sustain our volumes despite global headwinds. FMI exported 1,63,386 vehicles in financial year 2025 as compared to 1,63,155 vehicles in financial year 2024. Our continued focus on both domestic and export markets enabled us to sustain healthy capacity utilizations during the year. HMI continues to drive quality of sales strategy by enriching its portfolio with regular product interventions to offer superior customer experience. The SUVization and premiumization strategy has helped us to garner higher volumes in the SUV segment and also improved our domestic ASP. During the quarter, we registered record high SUV sales of 1,6182 vehicles while the annual SUV sales were recorded at 4,10,200 vehicles representing 69% SUV contribution to the total domestic sales. Hatchback and sedan contributed 20% and 12% respectively in financial year 25, reflecting the broader industry shift in customer preference towards the SUVs. On the fuel mix, the introduction of dual cylinder technology helped us to increase our CNG contribution during the year to 13.2% as compared to 11.5% last year. Our EV share increased up to nearly 1% in the overall fuel mix with the recent launch of Creta Electric, thereby reiterating our commitment towards sustainable mobility. Let me now share the quarterly financial highlights. Our revenue from operations stood at Rs. 1,79,403 million in Q4 financial year 25, as against Rs. 1,76,711 million in the same quarter last year. Favorable product mix along with pricing actions contributed to the top-line growth. On a sequential basis, the overall revenue grew by 7.8%. EBITDA for the quarter stood at Rs. 25,327 million as compared to Rs. 25,218 million in Q4 financial year 24. EBITDA margin was at 14.1% as compared to 14.3% in Q4 financial year 24. EBITDA for the quarter improved sequentially by a significant 280 basis points. EBITDA for the quarter 20,023 million in Q4 financial year 25 as against Rs. 19,640 million in Q4 financial year 24. Debit margin was at 11.2% as compared to 11.1% in the same quarter last year. Debit margins expanded by more than 300 basis points over the sequential quarter. FAT for the quarter was Rs 16,143 million as compared to Rs 16,772 million in the same quarter last year. The FAT margin was 8.9% as against 9.3% in Q4 of last financial year. On a sequential basis, FAT saw phenomenal growth of 39.1%. On a year-on-year basis, the impact of macroeconomic headwinds was mitigated by our cost reduction efforts and additional government incentives enabling us to sustain margins in line with the same quarter last year. However, on a sequential basis, our Q4 profitability witnessed sharp improvement primarily due to better operating leverage, pricing strategy, cost optimization efforts and higher government incentives. Let me now share the annual financial numbers for 24-25. HMI recorded revenue of Rs. 6,91,929 million as against Rs. 6,98,291 million in the same period last year, a marginal drop of 0.9% despite challenging market conditions and multiple demand headwinds during the year. Through our proactive planning, operational efficiency and strong product mix, we could effectively navigate the challenging environment while maintaining our competitive edge. EBITDA for the year was Rs. 89,538 million as against Rs. 91,326 million in FY24. EBITDA for the year came in at Rs. 68,485 million as against Rs. 69,247 million in FY24. We were able to maintain healthy EBITDA and EBIT margins during the year at 12.9% and 9.9% respectively. FAT for the period stood at Rs. 56,402 million against Rs. 60,600 million last year. FAT margin was at 8.1% in comparison to 8.5% in financial year 24. Moving on to the outlook for financial year 26. As highlighted by our MD in his opening remarks, for domestic, our endeavor is to grow broadly in line with the industry, while for exports, we are targeting 7-8% growth for the financial year 26. We have planned for a capex of around Rs. 7,000 crore in financial year 26, in line with our vision of driving sustainable mid-to-long-term growth. As we are already aware, HMI consistently strives to maintain industry-leading margins. For the upcoming financial year as well, our aspiration is to maintain healthy double-digit EBITDA margins. With the commencement of Pune plan from Q3 financial year 26, additional depreciation amid low capacity utilization in the initial period may weigh on year-term profitability. However, with our continued focus on optimized operations and our quality of growth strategy, we remain confident of securing healthy margins going forward. Lastly, this slide highlights our upcoming launches. I will not go into the detail as our MD has already covered this in his opening remarks. So, I conclude my presentation. Thank you all for your time and attention. Now, we open the floor for Q&A.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question and to restrict to two questions at a time. Kindly note, the management will use English-Korean translation for better communication. Hence, there could be a slight delay in the responses. We'll take our first question from the line of Rishi Bora from Kotak Securities. Please go ahead.

Yeah, congratulations team for a great set of numbers. My first question is regarding the quarter itself. On a sequential basis, excluding other operating income, our ESPs have gone up by almost 4.4%. So can you just give us what were the drivers of this? It was just mix or something else was also contributing to such a sharp increase on a sequential basis?

Hi Rishi, thanks for the question.

Ariharan here. Yes, our ASP has improved on a sequential basis. In fact, there are different contributing factors here. If you look at the domestic, especially 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. Apart from that, we also had a favorable product mix. Even on the export market also, the product mix was quite positive this quarter. So, all these factors have actually supported us for the improvement in ASP. In fact, our ASP has improved by more than 5% on a sequential basis. I hope I have answered your question, Vishnu. Yeah. And second question just on the industry side, right. So the hatchback segment as well as the sedan segment for us as well as for the industry has been in a consistent downtrend. So just wanted to get a sense from the management on what will change this and when should we expect some recovery, some bounce back from these two segments.

Thank you for your question, Tarun, this side.

This is a question we have been getting every year, but the segment continues to reduce. Please understand, you know, it is not about only affordability. I think it is also about the clear change in the customer preference. So what is happening is if you see the micro SUV segment, which did not exist three years back, suddenly that has become a very substantial part, you know, of the market. Almost 6%, 5.7% of the market was in 2024. In fact, by 6.3%. Now, so many of these hardware customers in the same price range are going to the to the SUV, micro SUV segment. So I think it is more about the body type than the affordability. That is point number one. Point number two is this segment earlier used to be, I mean, the hardware segment depend a lot on the first time buyers. But now the first-time buyers are very clearly moving again to the SUV, which is very clear even in Hyundai's first-time buyer percentage, which continues to go up. In fact, it has now reached almost 40%. So what I'm trying to say is it does not appear that there will be a bounce back in this segment. In fact, many of the players are leaving that segment. Also, you talk about sedan segment. Many of the players have left the premium sedan segment. So, it appears that SUV is the way forward. I think the only thing which can change is probably EVs. Maybe some opportunities may come in the EVs, but it is too early to comment on that as well. But in the near term, I don't see the segment bouncing. At the same time, it is substantial. You know, 23% hatch and even 9-10% sedan is still a good 30% of the market. So, I don't think we can ignore it. we still need to be present and I think Hyundai's strategy is very good that we are very strongly present there and of course we have no intention to leave these segments because they are really really very good for us even going forward. I hope I have answered your question.

Thank you Tarun.

Thank you. We will take our next question from the line of Dina Singh from Morgan Stanley. Please go ahead.

Hi, team. Thanks for the opportunity. I'll just go back to the gross margin question. Could you quantify what was the JAN price hike? What was the discount rate? And also, you know, we've seen in most of the companies that when EV share goes up, margins go down. So was there a drag that the electric vehicle rise had on margins?

So that's the first question. Hi, Benay.

Thanks for the question. So, the first one is on the price increase. The price increase was around 0.6% which we did in January. And point number 2 is on the discount. Yes, as I mentioned earlier, discount in the domestic especially has reduced on a sequential basis. Q3, the discount was at 2.6% and in Q4, it has reduced to 2%. So, there is a reduction of 0.6% on the discount as well. And point number 3 is on the EV profitability. Today if you look at Creta EV, of course if you exclude the launch related marketing expenses and the discount, we are positive on the Creta EV, the margin is positive. And going forward, of course, if you look at even the penetration level, currently even for industry and for HMI as well, the EV penetration is still at a very low level. So, you know, whatever is the margin impact should not have any material impact on our total profitability. Having said that, we are working on an aggressive localization strategy for the EVs especially. So, you already know that we have already localized the battery pack assembly with Greta Electric. We are already working with a local partner to localize the battery cells as well. So, there are a lot of opportunities for us to localize the components, especially on the EV side. I think when we do that, I think that should really support us to bring down the cost and support for the margins going forward.

That is helpful. And the second question again on EVs, you know, I noticed that you've increased the number of electric vehicle launches from four earlier to six now. So what's the thought behind that? Are we seeing more opportunity in EV than we anticipated?

What is guiding that change?

So, just to clarify, the four was the new models, but the six include refreshments as well. Because we have said very clearly, the 26th model launches, 26 include refreshments as well. So, that is what we are talking about. More details, of course, we will be sharing during the investor day.

Great, great.

Thank you. Great, great. Thank you.

We will take our next question from the line of Kapil Singh from Nomura.

Please go ahead. Good evening, sir. Congratulations on a strong performance.

My first question is on market share. We can see that quality of age strategy is working quite well and your margins have been better than previous quarter. But at the same time, there is some pressure on market share also that you see. So how are you thinking about the balance of these Are we going market share and margins? And will there be any new nail clippers this year which can drive up your market share from where you are in quarter four? And then on the exports also, recently we have seen some pickups. So, any more detailed cover if you can share what has happened that has caused the growth rates to pick up there? So thank you for your question. Look, no company wants to lose market share. Even we don't want to lose market share. At the same time, I think being listed, you know, brings in much more responsibility in terms of profitability and volume. You would have seen today also the results. You have seen the discount levels. So, obviously, we are passing through a phase where industry is under stress, you know. SIEM has projected one, one and a half percent growth in this financial year. So, and companies are having a strategy where price cuts, rampant discounts are there. We have already announced a very aggressive module plan and obviously it has been married to the Pune plant capacity expansion. So I think what is important is how do we navigate this period. So our challenge is that you know opportunity of course is because we are one company which has both export leverage as well as domestic leverage. So what we are doing is one but put the accelerator up on the exports both in terms of trying to look new markets also the existing models in the current market and also instead of reducing price what we are doing is you know we are introducing higher features in the lower trims also i think there's a question on asp one reason why we have been able to increase our asp especially the domestic asp is because we have been able to give say sunroofs in the lower trims Automatic in the lower trims. I think this is a very smart strategy because it prevents the need for higher discounts. It prevents the need for any price cut. It gives more opportunity to the customer. So I think to answer your question, we will continue on this path until this new model cycle kicks in. Out of these 26 models in the next 5 years, 8 of them will be in the next 2 years. You know, in 2 financial years starting April 25. So 8 of them will come. So I think we are a few you know time away from this new model cycle kicking in and I think until then we have to make sure that our core competence of brand network technology and it stays and then of course as we don't lose too much of market share I think this is what we are doing maintaining quality of sale and the balance between domestic export as well as between volume market share and profit I hope I have answered your question yes sir thank you so much

The second question is on the CapEx plan.

We have talked about 7,000 crores. Could you give us a breakdown of in what area this is going? And is this higher than the average levels that you will see over the next few years? Because, you know, earlier we had talked about something like 32,000 crores over 10 years. Leading to this, we have also talked about some costs. So, if you could give us some indication like will this drag down your margins this year or the EBIT margins or we should expect that you have other cost levers to offset that. Thank you. Hi Kapil, Hariharan here. So, number one on the CAPEX 7000 crore which we mentioned. The major portion would go for Pune expansion roughly around 40% we expect followed by 25% for some product related investments. see again this is the guidance which we are giving for financial year 26 so we will be sharing more details about the long term CAPEX plan in due course of time so even regarding this whatever we have discussed on the MOU so these are all some of the MOU commitments we have given to the state governments like the Tamil Nadu also Maharashtra also but as I mentioned more specific guidance on the long term CAPEX plan we will be sharing in some time Hope I answered the question correctly. Sure. And, sir, the cost part also you can give some direction. Yeah. So, yeah, so initially, so this year, financial year 26, as we mentioned, we will be starting this Pune capacity from Q3, financial year 26. So as you can understand a plant of such a scale initially you know the utilization level will be little low only and especially considering the overall weakness in the demand sentiment in the domestic market also. So that may have some impact on the margins but what we are planning to do is that as we have indicated we are planning with the aggressive product launches you know in the next 5 years. So, I think with that strategy, I think we are very much confident that, you know, apart from that, even the exports also we are going to focus to improve our volumes, you know, strongly going forward. So, these strategies, we believe that should give us a lot of support to maintain and secure the margins even going forward. Okay. Wish you all the best, sir. Thank you so much.

Thank you.

Thank you. We take our next question from the line of Gunjan Prithyani from Bank of America. Please go ahead. Yeah, thank you, team, for taking my questions. I just had, you know, first one is just quick clarification. You, you know, you mentioned eight of them in next two years. So, eight models in fiscal 26 and 27. Is that understandable, right?

Yes.

Fiscal 26 and 27 put together eight models.

And any breakup on ICE and EEV in that?

Overall, we have given out of the 26 models by fiscal 30, 20 will be ICE and 6 will be EEV. But please wait for the investor day for more clarity on the immediate plans.

Okay. And the other clarification was on this, you know, you did speak about the, you know, operating income being higher. Can you quantify what will be government incentive in this and, you know, how should we be thinking about it, you know, on a full year? There does tend to be a little bit of bunting up in second half, right? So if you could just give some color, how much was it in quarter four and how should we directionally think on the incentive for fiscal 26?

Hi, Gunjan. So if you look at our current MOU incentive, Tamil Nadu, We have three different types of incentives. The first one is the tax incentive. So, the tax incentive is something which we have been getting for long time and that incentive basically starts you know coming from the third quarter or sometimes in the second quarter also. And second point is the clean energy vehicle subsidy. That amount is somewhere around 25 crore rupees which generally comes in fourth quarter. And this year, we also have a new subsidy called as capital subsidy. Since we achieved the MOU conditions, both on the investment side and manpower obligation in last financial year, this particular incentive, you know, has accrued for us from this year, financial year 25 onwards. The amount is 75 crore rupees. So, this is the bifurcation. So, if you see sequentially Q3 versus Q4, the additional incentive from the Tamil Nadu MOU is around 100 crores. So, going forward, obviously, in the next year, every year, as I mentioned, the tax incentive will follow a separate timeline. But the PEG subsidy and the capital subsidy mostly accrue in the last quarter.

Okay, okay, got it. That's very clear. The second question I had, you know, more from the point that you made using India as an important export market, right? Are there any rethink on what are the markets that we can still, you know, add to, you know, in terms of exporting out of India? I mean, at least in Africa, you've touched upon earlier. But given the overall changes, you know, noise around tariffs, is there a rethink that we could have more markets which could get added with India services from an export perspective? And I'm now thinking, you know, next 18 months, a little bit, you know, next 3-5 years, you know, how should we think about the potential of export? Because 7-8% is great, but I do think, you know, there are more markets which can get added.

So, you know, some thoughts around that. Yes, thank you for the question.

This is Eunsoo. We are positioning the Hyundai Motor India as an export hub for emerging markets, especially in the Middle East and Africa, South Asia and Latin America. Currently we are exporting to more than 80 countries. And then we are very optimistic to the export market, current market, and also we are exploring some advanced countries like Australia and other regions. And then in terms of tariff complex, it will not affect the hours. It is between the U.S. and other countries. So the values of the tariff, we will improve our export volume. With expansion of Pune plant, we will reach 1.1 million units capacity. Currently last year, our export portion was 21%. we will increase to the 30% of our volume capacity to export. Our current model is very suitable for emerging market, so we are very confident for exporting market. Thank you.

I hope it is very... Sorry, go ahead, sir. Yeah, yeah. So, basically also, you know, you mentioned about some new opportunities. So, within Middle East also, like for example, in financial year 25, we started Venue in Indonesia, we started Venue in Yemen, we restarted Bhutan, we started Exter in South Africa. Later in the year, we started Nepal, we are exploring other RSD markets. Alcazar spaceship to Middle East and Africa. So, you know, while primarily it is emerging market, at the same time, different models in emerging markets, I think itself gives us a lot of opportunities to grow, you know, our export volume. So, I think this is important. And on tariffs and all, of course, we can continue to study because going forward, you know, India-UK trade agreement or etc., etc., maybe some new opportunities will come, especially with the EVs coming in from the HMI plants. So, I think we are very open and we will be discussing that what are the opportunities which can come to further increase the export.

And that is why we are saying by 2030, you know, the export penetration can go up and maybe reach 30%. Okay, got it. Thank you.

Thank you very much. I will go and back to you. Thank you. We will take our next question from the line of Amin Tirani from JP Morgan. Please go ahead.

Yes, hi. Thanks for the opportunity.

So my first question is on your comment that you expect to grow broadly in line with domestic industry this year. Given that the new plant is coming up in the second half and we probably will have some refresh or product launch, is it a bit of a conservative guidance or are you expecting some headwinds? Because ideally, we would have expected that you could actually outperform the market this year after, you know, a bit of underperformance last year.

So, look, the year is divided into S1 and S2.

Obviously, the new plant will come in the S2 of the financial year. I think this you have to keep in mind.

I hope this also answers the question, you know. Yeah. Okay, understood. And secondly, you know, just this clarification on the previous point, you know, did I hear correctly that, you know, by the time the full ramp-up happens to 1.1 million, you are expecting exports to become close to 30% of volumes?

Yeah, financially, yes.

The answer is yes. We already reached 22% this year. And the plan is that this is an opportunity. I think we're looking at reaching 30% by 2030. By 2030.

Okay, but that would involve even more expansion, I'm assuming, beyond FY27-28.

No, no.

Okay. 1.1 million will happen by financial 28. I mean, calendar 28 for sure. We have not announced financial 28 or calendar 28. I think around that time, we should be looking at export expansion. Look, it's very difficult to give exactly 28 or 29. But I think the intent is to really continue to increase export as a percentage of local sales.

Understood.

Understood. Okay.

Thank you. I'll come back and look at it.

Thank you. Thank you. We'll take our next question from the line of Prashant Kothari from Pictet.

Please go ahead.

The line is disconnected of Mr. Prashant. We'll take our next question from the line of Arvind Sharma from Citi. Please go ahead.

Hi, good evening, sir. Thank you for taking my question. On the Kune plant, when the commercialization starts, Would there be a change in the vendor base? I am talking both from the perspective of localization as well as the group company. That is the first question.

No, this is Gopalakshmi here. We are trying to develop a whole lot of vendor ecosystem. in the punia also and the whole the plant will be in terms of automation in manufacturing practices similar to the world class manufacturing as to the country global standards and all the preparations are going on so the supply from group companies would remain at the current level we'll be leveraging uh their capability both of any plan after the

Thank you. Second question would be just for accounting purpose. Was there any PLI benefit that you accrued in the fourth quarter which is there in the top line, in the reported top line?

Hariviran here. So, as we have Creta EV is a product we have launched recently. But you know since you know there is there are some minimum domestic value addition conditions to be made which currently you know there is some gap there. But we are continuously evaluating the localization opportunities on the EV segment and which we believe that as we have already indicated one is the battery pack we have already done and there are other plans on the component side for EVs. to localize going forward. So going forward, I think the strategy is to avail the PLA incentive. But yes, currently, we are not eligible.

All right. Thanks, sir. That's all from my side. Thanks so much.

Thank you. We'll take our next question from the line of message, Mangal, from Jesse. Please go ahead.

Hi, good evening, and thanks for taking my question. On the Pune plant, can you share which all models are you planning to manufacture there and how many of your existing models will also be made there versus just the new models?

Thank you for the question. This is Enzo.

uh we will produce the suv model uh i could not specify the model names that we will announce shortly uh and then in the coming years we will uh added another the suv model in the connect plant i hope i answered your question okay sure thank you secondly uh uh asked on the operating cash flow so the effect for the whole year was

almost flagged by OI but the operating cash flow there is quite a bit of decline and seems there are some changes in other liabilities. Can you elaborate what happened on the other current liabilities?

So if you see the cash flow, operating cash flow, mainly if you see the this year beginning, we had paid TDS on dividend, the special dividend which we paid to HMC in last financial year. The TDS was remitted in the current financial year, that is financial year 25. Plus also there has been some increase in the MOU incentive received from the Tamil Nadu government. So, these are all some of the major factors which has actually impacted the operating cash flow.

Okay, thanks very much. And if I can ask just one last question, what is, how long are these Tamil Nadu incentives valid for you? Thank you.

So, the Tamil Nadu incentive, the tax incentive part, it is valid till 2032 financial year. And the other subsidies, the CEG subsidy and the capital subsidy, they are generally valid for 20 years from the commencement date. One point I would like to add is that all these subsidies are subject to fulfilling the MOU conditions. On every year, we need to achieve some conditions. So, the incentive eligibility is subject to that.

Okay, thank you very much.

Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Rishi Vora for closing comments. Over to you.

Thank you everyone and we would like to thank the management for giving us an opportunity to host the call. With this, we conclude today's conference call. On behalf of Hyundai Motors India Limited, we thank you for joining the call and you may now disconnect from the line. Thank you.

Thank you, ladies and gentlemen. You may now disconnect your lines. Thank you.