Hyundai Motor India has reported significant margin pressures affecting its operations, with the company facing a combination of rising commodity costs and additional expenses from its Pune plant operations that are expected to impact financial performance.

Q3 Margin Impact and Forward Guidance

The company has disclosed that margin pressures experienced during Q3 are attributed to multiple factors including commodity price increases and costs associated with the Pune plant. Management expects these combined factors to result in a 100 basis points effect on margins, with this impact anticipated to persist for one year.

Rising Commodity Costs Present Ongoing Challenges

The company continues to face significant commodity price pressures across several key materials essential to automotive manufacturing. The price increases are particularly affecting precious metals, copper, and aluminium - all critical components in modern vehicle production.

These commodity price increases represent a significant operational consideration for the automotive manufacturer, as these materials are integral to various vehicle components and manufacturing processes.

Tax Cut Benefits in Compact SUV Segment

Despite the margin pressures, Hyundai Motor India has reported positive developments regarding recent tax policy changes. The company has observed that the maximum impact of tax cuts has been felt specifically in the compact SUV segment.

This development suggests that policy measures have been particularly beneficial for this vehicle category, potentially improving market dynamics and consumer accessibility in the compact SUV space.

Operational Outlook and Cost Management

The combination of commodity price pressures and Pune plant-related costs presents a complex operational environment for the company. With the anticipated 100 basis points margin impact expected to continue for one year, the company faces the challenge of managing these cost pressures while maintaining competitive positioning in the market.

Hyundai Motor India Limited has announced its unaudited standalone and consolidated financial results for the third quarter and nine months ended December 31, 2025, demonstrating strong operational performance and sustained growth momentum. The Board of Directors approved these results at their meeting held on February 02, 2026, with the automotive manufacturer posting consolidated revenue of ₹179.74 billion for Q3FY26, marking growth from ₹166.48 billion recorded in Q3FY25.

Q3FY26 Financial Performance

The company's third quarter results showcase robust year-over-year growth across key financial metrics. Revenue for the quarter reached ₹179.74 billion, representing an 8.0% increase compared to the same period last year. The consolidated net profit stood at ₹12.34 billion for Q3FY26, up 6.3% from ₹11.61 billion in Q3FY25.

Nine-Month Performance Overview

For the nine-month period ending December 31, 2025, Hyundai Motor India demonstrated consistent performance with EBITDA reaching ₹66.33 billion, up 3.3% year-over-year from ₹64.21 billion. The EBITDA margins expanded to 12.8% for the nine-month period compared to 12.5% in the previous year, despite costs associated with capacity stabilization and commodity price pressures.

FY26 Outlook and Margin Guidance

The company expects EBITDA margin between 11% and 14% for fiscal 2026, expressing confidence in maintaining double-digit margins ahead. Management is optimistic about strong wholesale growth in coming quarters, supported by good dealer inventory levels and GST support. The company reported record domestic sales in January with 9.5% year-over-year growth and total sales up 11.5% year-over-year.

Market Performance and Strategic Highlights

The company benefited from GST 2.0 and festive tailwinds supporting domestic demand, with wholesale volumes up 5% quarter-over-quarter coupled with robust retail volumes. CRETA reclaimed its position as the No. 1 SUV sold in India, achieving highest-ever annual sales of 200,000+ units in CY2025. The New Venue garnered strong market response with nearly 80,000 bookings and encouraging first-time buyer contribution at 48%.

Hyundai Motor India continued its robust export momentum with volumes up 21% year-over-year in Q3FY26, contributing 25% to the overall sales mix. The company also made a strategic entry into commercial mobility through Prime HB and SD taxi offerings.

Management Commentary

Commenting on the results, Mr. Tarun Garg, Managing Director & Chief Executive Officer, stated that the third quarter performance underscores the company's resilience and strong execution of "Quality of Growth" strategy, marked by healthy growth in volumes, revenue and profitability. He highlighted that on a year-to-date basis, EBITDA margins expanded to 12.8% against 12.5% last year, supported by efforts towards improving sales mix and prudent cost control measures.