Hyundai Motor India Ltd is charting a steady growth trajectory as the company reports consecutive quarterly profit increases, fueled by robust rural demand, expanding exports, and growing preference for high-margin sports utility vehicles (SUVs). The automaker anticipates this positive momentum to extend into the March quarter, with its recently upgraded Venue SUV already amassing over 80,000 bookings, signaling strong market reception.
Financial Performance and Market Dynamics
The Indian subsidiary of the South Korean automotive giant achieved a notable 6% year-on-year profit increase to ₹1,234 crore, while revenue climbed 8% to ₹18,217 crore during the quarter. This marks Hyundai India's second straight profitable quarter following four consecutive year-on-year quarterly losses between Q2 FY25 and Q1 FY26, indicating a significant turnaround in financial health.
Key Growth Drivers
Several factors contributed to Hyundai's improved performance. Rural markets emerged as a particularly strong contributor, accounting for a record 24% of total sales. This surge was partly attributed to reductions in goods and services tax (GST), which enhanced affordability and stimulated demand in non-urban areas.
Export performance was equally impressive, with overseas shipments growing 21% to 48,888 units, meaning one in every four Hyundai vehicles produced in India was destined for international markets. This export growth significantly outpaced domestic market expansion, which registered a modest 0.4% increase to 146,548 units during the October-December quarter.
Product Mix Evolution
The company's product portfolio continues to evolve with changing consumer preferences. SUVs now constitute 70% of domestic sales, up one percentage point from the previous year. This shift toward higher-margin vehicles has positively impacted profitability. Meanwhile, the share of internal combustion engine vehicles decreased slightly from 85% to 83%, while electric vehicles maintained a 1% share with only two models currently available: Creta Electric and Ioniq 5.
Compressed natural gas (CNG) vehicles showed promising growth, reaching 16% penetration in Q3 – the highest quarterly mix ever recorded by Hyundai India. This represents an increase from the 14-15% range observed last year, reflecting growing consumer acceptance of alternative fuel options.
Management Perspective and Strategic Outlook
Tarun Garg, Managing Director and Chief Executive of Hyundai Motor India, highlighted the positive impact of policy reforms on market sentiment. "The implementation of GST reforms brought greater clarity and stability to the indirect tax framework," Garg stated during a post-earnings press conference. "This, coupled with interest rate cuts, significantly improved customer buying sentiments and brought in a renewed wave of optimism."
Garg, who assumed his role as the company's first Indian MD and CEO on January 1, emphasized structural shifts in consumer behavior. "Importantly, structural shifts in consumer preferences continued to further strengthen with increasing adoption of SUVs, growing acceptance of new technologies and a clear preference for higher value and feature-rich products," he added.
Competitive Landscape and Future Plans
Hyundai, which lost its position as India's second-largest carmaker by sales to Mahindra & Mahindra in 2025, remains optimistic about future growth prospects. The company is aligning its strategy with industry projections of 5-6% volume growth in the next financial year.
"We are also sticking with that industry growth. So, I think our model mix is well positioned to grab all the opportunities which are coming up because of the GST cut," Garg explained.
Looking ahead, Hyundai plans to introduce new electric and clean fuel vehicles to comply with upcoming emission norms scheduled to take effect from April 2027. The company also identifies entry into the taxi segment as a potential growth avenue, having recently launched a fleet of cars specifically designed for commercial operations.
"Another thing which we mentioned was the taxi, which has received some great responses. Of course, it is only one month, but the initial response is very good. I think that will also help us to get more volumes going," Garg noted regarding this new business vertical.
Industry Context and Peer Performance
Hyundai becomes the second major automaker to announce quarterly results, following market leader Maruti Suzuki India Ltd. Maruti reported a 4% year-on-year increase in profit after tax to ₹3,879 crore, despite being impacted by a one-time provision of ₹593 crore related to new labor regulations. The company's revenue surged 28% to ₹50,959 crore on the back of record quarterly sales of 667,769 units.
Hyundai faces intensifying competition from domestic manufacturers Mahindra & Mahindra and Tata Motors, particularly in the SUV segment where all three companies are aggressively expanding their offerings. Despite this competitive pressure, Hyundai's stock responded positively to the earnings announcement, rising 1.54% compared to a 2.13% gain in the Nifty Auto index on the day of results disclosure.
"By leveraging opportunities from the new Venue and exploring new markets, we are confident of sustaining growth momentum in Q4 and beyond," Garg concluded, expressing confidence in the company's strategic direction and market positioning.
