Hyundai Motor India (NSE:HYUNDAI) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the q two and h one FY twenty seven earnings conference call of Hyundai 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 presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then 0 on your touch tone phone. I now hand the conference over to mister Vivek Kumar from ICIC Securities. Thank you, and over to you. Thank you. Good evening, everyone, and welcome to the q two and h one FY twenty seven earnings conference call of Hyundai Motor India Limited. From the management team today, we have with us Mr. Tarun Garg, Managing Director and Chief Executive Officer Mr. Wangloo Hur, Chief Financial Officer Mr. DH Park, Chief Operating Officer Mr. Mukundin, MS, Chief Manufacturing Officer Mr. Sarvananthi, Function Head Finance and Mr. K. S. Hariharan, Head of Investor Relations from Hyundai Motor India Limited.

1:13 I would like to inform you that the call is being recorded. I would now like to invite Mr. K. S. Hariharan from Hyundai Motor India Limited. Over to you, sir. Thank you, Vivek. Good evening, everyone. Welcome to the earnings call for the second quarter and half year of fiscal year twenty six twenty seven. Before we begin, I want to remind you of the safe harbor. We may be making some forward looking statements that are to be understood in conjunction with the uncertainty and the risks that the company faces. The conference call will begin with our MD and CEO remarks on the performance and outlook, followed by a brief presentation by me on our q two numbers, after which we'll be happy to receive your questions. Now I'm handing over to our MD and CEO, mister Tarungan.

2:01 Over to you, sir. Thank you, Hari. Good afternoon, everyone, and thank you for joining us today. So fiscal twenty seven represents an important chapter in HMIL's journey marked by several notable milestones. Thirty years of successful operations in India, 4,000,000 cumulative exports, and 100,000 vehicle production at Pune ramp up within a short time. As we enter the next phase of our growth, we are encouraged by the strong commitment by HMG towards India. As emphasized by our executive chair at the Pune plant in operation, India will remain a key focus market for the group for investments in advanced manufacturing, innovation, r and d, and localization. This, coupled with our thirty years of strong legacy, will make the next thirty years epic for Hyundai in India.

2:50 Moving on to quarterly business performance, I'd like to highlight that following the production disruption last quarter, we restored operations back to normalcy within just twenty two days, reflecting our operational agility and resilience. We registered our highest ever quarterly total sales in the quarter gone by, reflecting a strong momentum in sales even before our new model cycle kicked in with beyond launch two days back. Our domestic quarter two fiscal twenty seven volumes grew by 19% both quarter on quarter and year on year, supported by robust customer demand and our strategic on ground actions. The quarter also witnessed few notable highlights. Highest ever rural contribution of 26.6%, highest ever CNG sales with contribution reaching 19.1%, and highest ever 100 registration for fleet sales.

3:47 As you know, launch of Beyond Master onset of our golden product cycle. I'm happy to share that the response for this product has been extremely encouraging with strong appreciation for its futuristic design, advanced AI enabled features, and attractive value proposition. Moving on to electrification. During the quarter, we witnessed encouraging traction for Cretta Electric, which helped double our EV contribution on sequential basis. Building on this momentum, we are fully geared up for the launch of our dedicated mass market EV in quarter four of fiscal twenty seven. Finally, we'll continue to strengthen the overall EV ecosystem supported by localization, charging infrastructure, and other customer centric initiatives.

4:34 Our aim is to bring our EV penetration closer to industry levels by next fiscal year. We strongly believe beyond and the upcoming EV will further strengthen our leadership in SUVs and contribute meaningfully to our growth. Backed by festive demand, incremental capacity from the third shift operations at Pune, and, of course, two new products, we are firmly on track to achieve full year growth guidance of eight to 10% in domestic solar sales while also being confident about outpacing the industry in s two of fiscal twenty seven. On capital three, we welcome the government's progressive framework. We have already committed to increasing the share of eco friendly powertrains in our portfolio to 50% plus over the next four to five years.

5:27 We remain well positioned to comply with capital norms while continuing to offer customers a wide range of mobility solutions. Moving on to exports. Despite ongoing geopolitical challenges, we witnessed a growth of 4% on year on year basis and strong sequential growth of 38% on quarter on quarter basis in exports. This growth was witnessed across markets reflecting the underlying demand. On quarter on quarter, Middle East grew by 57%, Africa by 35%, Mexico by 56, and Latin by 10%. Looking ahead, the worsening geopolitical situation has impacted our original plans to some extent. However, we are making every effort to minimize the impact.

6:14 We aim to deliver in exports on year on year basis supported by our strong products and operational flexibility. Coming to financial performance, we delivered our highest ever quarterly revenue, costing 20,000 crore rupees milestone. Revenue recorded growth of 19% on year on year and 27% on q on q basis. However, significant commodity headwinds weighed on the quarter's margins. While EBITDA margin declined on year on year basis, margin improved sequentially supported by operating leverage, healthy mix, and our cost saving efforts. Looking ahead, cost headwinds continue to pose challenges to profitability. However, improved business outlook, coupled with prudent pricing and cost control measures, provide us confidence for healthy margin trajectory in h two.

7:08 Our endeavor take up measures to achieve our EBITDA margin guidance that we have given to you for the full year. Lastly, I extend my festive greetings and best wishes to everyone. Thank you for your continued trust and support. I now hand over back to Harry. Thank you, sir. Let me directly get to the sales numbers for the quarter. We achieved total sales of 2 lakh 19,072 units in q two fiscal year twenty seven compared to 1 lakh $90,009.21 units in the corresponding quarter, a growth of 14.7% year on year. On q on q, volumes grew by 23%, supported by growth in both domestic and export markets.

7:55 In domestic, we sold 1 lakh $65,007.72 units compared to 1 lakh $39,005.21 units in the same quarter last year. This helped us with a healthy growth of 18.8% year on year. Despite a challenging geopolitical environment, exports grew 3.7% on year on year. Moreover, exports grew 38% on sequential basis, supported by strong demand across markets. Export volume contribution stood at 24% in q two fiscal year twenty seven. Domestic volumes witnessed growth across segments both on year on year and q on q basis.

8:41 SUV mix remained healthy in both urban and rural markets. We continue to witness increased traction in our CNG sales. During the quarter, our CNG sales volumes grew by 48% on year on year basis. Our CNG contribution has grown consistently every quarter, improving from 15.2% in q two fiscal year twenty six to 19.1% in q two fiscal year twenty seven. Now coming to financial highlights. Q two fiscal year twenty seven witnessed our highest ever top line performance for any quarter since our inception. The in q two fiscal year twenty seven stood at rupees 2 lakh $600,961,000,000 against rupees 1 lakh 74,608 million in the corresponding quarter.

9:37 This resulted revenue growth of 18.5% on year on year basis. However, raw material cost inflation exerted pressure on profitability. EBITDA stood at rupees $1,900,745,000,000 as compared to rupees $2,400,289,000,000 in q two fiscal year twenty six. EBITDA margin was at 9.5% as compared to 13.9% in q two fiscal year twenty six. EBIT stood at rupee $1,400,191,000,000 for the quarter as against rupees 19,114 million in q two fiscal year twenty six. EBIT margin was at 6.9% in q two fiscal year twenty seven.

10:23 FAT for the quarter was rupees $11,009.06 2,000,000 as against rupees $1,500,723,000,000 the corresponding quarter. FAT margin was 5.7% in q two fiscal year twenty seven as against 8.9% q two fiscal twenty Turning to profitability drivers for the quarter. On year on year basis, we had positive levers like higher volumes, favorable currency, and price hikes. How raw material cost inflation was so steep, which impacted the margins. On a q on q basis, we're able to deliver profit growth with the support of higher volumes, favorable product and export mix, and cost saving initiatives, which helped to mitigate the raw material cost savings.

11:15 Our EBITDA grew by 31, whereas PBT and PAT both grew by 35% on a q on q basis. Lastly, I want to conclude the presentation by highlighting that despite a challenging business environment, we remain firmly anchored to our core fundamentals. Amidst the competitive market landscape and absence of new models, we were able to maintain disciplined pricing and also deliver improved ASP, reflecting our continued focus on quality of sales. Our domestic discounts have come down from 3.2% in q two fiscal year twenty six to 2.9% in q two fiscal year twenty seven.

12:01 Our overall ASP improved by 2% on year on year basis. Our continued focus towards strengthening our local supply chain ecosystem has yielded positive results with our localization levels further inching up to 84% at tier one level in q two fiscal year twenty seven. Looking ahead, we remain committed to disciplined execution and sustainable quality led growth. This concludes my presentation. Thank you all for your time and attention. Now we open the floor for q and a. Thank you. 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 touch tone telephone.

12:48 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. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We'll take our first question from the line of Chandramoli Muthaya from Goldman Sachs. Please go ahead. Hi. Good evening, and thanks for taking my questions. My first question is just around the buy on. I understand that this is a model which you will possibly start manufacturing in the Chennai plants, where there is some vacant capacity. So just wanna understand what is the sort of capacity that you think you'll need to allocate to the VYUN? And just related to to that on on new models, just also wanna understand the dedicated India EV.

13:40 If there's any approximate time, like, timeline that you think the the launch is going to be possibly late late by '26, or or do you think it is... It's an event for next calendar? Thank you for your question, Tyler, on this side. So, yes, beyond and locally, we both will be producing the Chennai plant, which will help us take the Chennai plant capacity utilization to more than 90%. On numbers, if you see, we are doing about 170 or 1,000 of CRATA. We believe Creta plus Beyond put together, we should be looking at 250,000 annual volumes. So this is how we are looking at the volumes. Regarding the launch of the of the of the EV, it will be early of of next year early of next year.

14:29 So early of next calendar, what I mean to say, early of next calendar. So January, February 27. Have I answered your question? Got it. That's helpful. Thank you. My second question is just around the export equations. I think we started the year with with target of doing between eight to 9% export volume growth, but the geopolitical situation has changed. I think more recently in in Saudi Arabia also, both in in the Red Sea, and I think there's been some drone incidents at at some of the critical airports in the country. So now now it looks like you're talking more about growing the business this year than doing an eight to 9% volume growth. So I just wanna understand what are the milestones that you need to achieve to to get to that sort of number.

15:18 And a lot of your peers have been talking about lack of availability of ships and vessels. So is there anything that that you are able to do to potentially face kind of impact? Hi, Chandru. Harry here. See, of course, no doubt geopolitical issues continue to create disruptions to our operations. But still, we are pretty confident of our h two trajectory because the h one, of course, was quite challenging for us. But h two, we believe that we should be able to deliver high double digit growth. Right? So there are certain levers for us. Number one, if you see the demand itself. So despite this tough geopolitical condition, demand continues to stay intact across markets. Right?

16:07 That is number one. Number two, if you see the products. We have been seeing very strong traction for all our products across markets. Just to give you some example, venue. If you see the new venue, we are expecting at least to double the volumes in this calendar year as compared to last year. Similarly, the extra. Extra, again, we are looking at at least 50% growth, you know, as compared to last year. And beyond, again, as AMD has mentioned in his remarks also, beyond, again, we are planning to export, you know, in q four. And, basically, our target is going forward. We are looking at exporting to 50 plus countries. I think there are a lot of opportunities here on the product front.

16:53 Number three is markets. So h one, if you see, we saw very good demand in markets like Latin America, Mexico because one said Middle East has been facing issues on the logistical front. But the other markets where we are able to push additional volumes, I think we are getting, you know, positive results there. Even in h two as well, we are looking at, you know, a lot of opportunities in those markets were mentioned. And even, for example, Mexico, we are looking at a lot of opportunities for the new as well, which we are planning to explore. And finally, on the Middle East part, the logistical issues, yes, these things continue. But we are trying to find out, you know, a lot of options here. We are looking at alternate rules. We are looking at different ports. So many things we have been, you know, trying to do in in coordination with our logistics partner.

17:51 So, ultimately, if you see, there are many things we are trying to do to to achieve our, you know, this double digit growth, whatever we are guiding in h two as far as export is concerned. Thank you, Shant. Got it. That's helpful. So just the last follow-up, $170,000 going to $250,000 on mid side SUV portfolio, that's that's our domestic business expiration? Yes. That domestic export will be over and above that. Makes sense. Correct. Thank you very much and all the best. Thank you. Thank you. Next question is from the line of Dinai Singh from Morgan Stanley. Please go ahead. Hi, team. Thanks for the opportunity. Two questions from my side. First is in media interviews, we talked about the beyond getting 2,000 orders per day, I believe.

18:46 Any update on what is your order backlog over there? Linked to that, any time line for third generation credit? Secondly, on the cost pressures, we noticed that your discounts are slightly up quarter over quarter. Any views on how discounts are trending in Q3? And if you could also share what is the incremental commodity pressure in Q3 versus Q2? So many questions. So look, discounts are year on year 2.8% as against 3.1% of last year, the same quarter. Of course, you know very well, Bene, seasonality is an important factor. So discounts quarter on quarter sometimes can give a very... And it's a very, very marginal thing in any case. Going forward, as you know, beyond has come in, even the new EV will be introduced in the early next quarter. So we believe that, as you know, the models don't have any discount. So the average discounts, despite such stable or whatever, we are not really seeing...

19:42 We are not projecting a higher discount than this in the h two. So I think these two new models should help us to to keep the discounts in control. On the, of course, Harry will Harry will explain. The traction for the Beyond is very strong. It's too early to get into, okay, booking numbers or whatever backlog, etcetera. But the traction is very strong, and I think two fifty thousand annual numbers looks like a conservative target. In fact, I'm already telling my teams to look at opportunities if we can further increase it. So that is where we stand. At the right time, we will be informing the numbers well for the bill. Thank you. Right. Right., again, on the raw material front, as we have shown in the presentation as well, so q two margins were mainly impacted by this cost headwind. So year on year, we have seen roughly around 400 basis points of commodity impact.

20:32 Sequentially, the impact was around two fifty basis points. We could mitigate the impact to some extent through some cost saving activities like localization, value engineering, whatever. Right? And also through some price x as well, whatever we have done so far this calendar year. So we will continue to closely monitor the commodity trends. See, for us, both volumes and margins are important. I would like to reiterate this point. So, you know, going forward also, we will try to take all the necessary measures to protect both volumes and margins. Thank you. And any number on what is the q three commodity headwind tracking? Is it... Are you seeing incremental commodity headwind? Any comment on that?

21:18 See, it is it is difficult to give a clear outlook here because there are two things. One is raw material has been highly volatile. And second, we have been seeing divergent trends as well. So for example, precious metals and all, we have been seeing a downward trend. On the other hand, like, the copper, plastic, I think these are all continuously rising. So think very difficult to comment at this point. But as I mentioned, we will closely monitor the the trajectory of the trends, and we will take appropriate measures to protect the margins. Thank you, Vinay. And and and the generation three,, any timeline on that? Subhunay, have patience. I think we already announced the two new models right now. And, of course, it will happen, obviously, but we are... We're still we're still not announced on timeline. So please please bear with us. Thank you. Yeah. Yeah. Well, thanks team, and best wishes for all these upcoming launches.

22:12 Thank you. Thank you. Thank you. Order to ensure that management is able to answer queries from all the participants in the queue, Please restrict your questions to two at a time. You may join the queue for follow-up questions. The next question is from the line of Kapil Singh from Nomura. Please go ahead. Yeah. Hi. Good evening, sir. Firstly, on the demand for festive season, can you share some color how has it been going? And you mentioned that you are looking at a double digit growth for the full year. For H2, for HMI and for the industry, what is the outlook? Which are the segments which are doing well? There have been some concerns on rural side as well. So just some color on demand outlook.

23:01 So, Kapil, thank you for your question. So demand looks very strong. And S2, we believe we are on track to achieve 8% to 10% growth year on year in S2 over last year. On the industry front, very difficult to to daily forecast what others are going to do, but probably 5%. As I have mentioned earlier, that CAGR is 5%. Now the base effect is is utilized. So there are headwinds. There are tailwinds. Possibly, we should be back to about five, five and a half percent of industry growth, but we are confident of eight to 10% growth. On the festive, as you know, the moment you see the festive and try to see only Navratri is not a fair comparison. You know? Because last year, August 15 till September 21, there was hardly any sales.

23:50 So... But Sharad plus Navratri, HMI was up 31%. Even Ganesh, Ounam also was 75%. So traction is very strong. Dealers are asking for cars. When I asked about beyond waiting period, we are trying to reduce. Of course, initial waiting period is depending on variance going from two months to six months. So it it looks it looks strong. November, the good thing is that Diwali is in... It... On November 8. So I think we will have a good traction, and December anyway is good. So possibly, the the headwinds should be overtaken by the tailwinds. You know? Also, on the raw material, I just want to say that the industry view is that that probably after the midterm elections, the raw material should come down, which should eliminate the need for a very substantial price increase.

24:43 Because the way things are... I mean, if the raw material prices... Raw material does not go down, then possibly industry will have to take a very high price increase, which can affect the demand. But if the raw material comes down post the US midterm election, I think that need will be eliminated. So that also should be a demand driver. Any other question I missed? Have I answered everything, Kapil? Yes, sir. We are also regional color. Rural, urban, anything. Rural. Rural. Okay. Yeah. Yeah. Yes. So rural remains strong, Kapil. I mean, finally speaking, while El Nino... When the more you read the newspaper, you become tense. But when you talk to your dealers or when you talk to the sales consultant, then, definitely, there is no problem. So I think, structurally, India has become much stronger. The network, the roads road infrastructure. I have already been mentioning about 60% of our new network is in the rural areas. We shared that the rural penetration was the highest in the HMIS history last quarter, 26.6%.

25:43 So things are looking very good, and I still believe that rural will continue to outpace urban even going ahead. So we are... As of now, we don't see, you know, that there is a much bigger impact of El Nino on the rural demand for cars. I cannot comment on anything else. Yeah. Thank you. And also, one more thing, Kapil. As you know that we have been mentioning about the SUV traction even in the rural areas. So rural SUV traction is also around 68, 69% like urban. I think that is another reason which gives me lot of confidence that we are now the beyond coming in. You know? So possibly, the rural traction can continue because of that love of SUVs for the... Even in the rural area. So I think that is another tailwind for us. Thank you. Sure, sir. That's great to hear. Thank you. And second second question for Gomisi. To rejoin the queue, please?

26:34 Sure. We'll come back in the queue. Thank you. Next question is from the line of Raghunandan NL from Nuwama Research. Please go ahead. Thank you, sir, for the opportunity. Congratulations on Bayonne launch. My first question for Greta, last twelve months domestic volume was around 193,000. Do you expect volume to reduce to 170,000 due to cannibalization from Payone or model changeover of Creta to the next generation? Or do you think there can be upside risk to your estimate on Creta? Look. Last twelve months will also include the October, November sales of last year. So I don't think that's a very good way. We have already calculated probably this year. We would be somewhere around one seventy. So we believe that credit is somewhere around one seventy, and Creta plus Beyond should be two fifty. But we understand, underlying thing is this is a forecast only. This is a forecast how much exactly will be Creta, how much exactly will be Beyond, because this is more from a capacity planning purposes. Like I mentioned to Vinay, I think the $2.50 looks conservative. Probably, there's an opportunity to grow even more. But I would not like to comment as of now.

27:52 Let's see how things progress, how the geopolitical situation progresses going forward. We are also going to launch the CNG in January and beyond. So I think that will be another tailwind for beyond. So we will see. And then maybe next... By next quarter, we should be in a much better position to really tell you about, you know, how how much more probably we can do than $250,000. Yeah. Thank you. Thank you for that, sir. Wishing that numbers exceed your expectation. On Bayonne, how do you see the contribution of Bayonne in export market? What kind of potential do you see there? If you see, we have already mentioned that 50 countries have already shown interest. About 34 of them are in the Latin America Latin America and about 14, 15 in The Middle East, some in the Asia Pacific.

28:46 So it's very early it's very early to say what would be the contribution, but I think Beyond should get a very, very strong traction is is what deal. And since yesterday, I've been receiving a lot of positive things from the distributors. K. Okay. When are you going to start the launch? And some of them joined the the the the launcher... Launch also. So let's see. Like I said, another couple of months, we should be able to give you a good picture. But as of now, 50 countries is is very clear that they are going to take beyond from India. Thank you. And, Raghu, just add Thank you. Beyond Bayon again will support us to improve our SUV mix in exposed. So SUV mix has been already showing some improvement for us. I think Bayon will further support that. Noted, Harry. Thank you, and wishing all the best.

29:36 Next question is from Gunjan Pityani from Bank of America. Please go ahead. Yeah. Hi. Thanks for taking my questions. My first question is on this dedicated easy launch that you spoke about for quarter four. Can you give us a little bit more color on, like, what is going to be the addressable market here? And you made this point that, you know, this should get our EV penetration closer to where the industry mix is. So is it fair to say that we're looking at overall mix for you, you know, for for us also getting to somewhere around, you know, seven, 8%, which is where the industry is right now versus 40... Versus currently 2%? Right? So a little bit color on how should we think about this model market sizing and, you know, how do we look at our volumes there?

30:27 Yes. Spot on. You are spot on. So industry contribution is this year about 66%. Maybe it will be seven, seven and a half percent going forward. We believe with this new EV, we should be touching somewhere around seven, seven and a half percent in the next fiscal. So that is one. Number two, like we mentioned, it is in the less than four meter compact SUV segment, the venue segment. However, it is not going to be like a venue derived EV. It is going to be a dedicated EV, a base of EV, which has been which has been designed keeping India in mind. So I think we are very, very confident about about this car. Like I mentioned, we have already done a good localization in... But has already... Even the power electronics, ICCU, even before the launch, we would have localized.

31:14 So I think we would have a good good positioning of the car. And the way it looks, it looks like a very good opportunity. Yeah. Will this be next year? I I missed it? Yeah. Please go ahead. Sorry. You know, just quickly on this... Will it be TLI, like, like, ready in terms of localization and thresholds, which are typically needed when you said localization has been done. So is that what they're inspiring right from the beginning? Right. So like I mentioned, CRATA, we've already got a provisional PLI, PLI compliant certificate. We're just waiting for the final certificate. On, actually, on the EV, of course, you know, we will be able to announce it only when the car is ready. So we... The aim is to make it PLI compliant. So... But we will be announcing it as and when we get it.

32:10 Yeah. Thank you. And my my second Sorry. Question Can I take one question? I request you to I request you to rejoin the queue, please. Thank you. Next question is from the line of Yash Agrawal from Nirmal Bank. Please go ahead. Hi, sir. Thank you for the opportunity. My first question is on the export volume. As I'm seeing a trend in last two, three years, the SUV contribution to total export volumes is around 20%. So what is that our SUV volumes on the contrary, like, in domestic, it's close to 70% in export. It's less than 20%. It's not gone up over the year. Yeah. So that's a great opportunity for us.

32:58 You have spotted it right. And like Hai mentioned earlier to Vinay's question, I think, so we are looking at... Three things have happened. One is extra LSD, which has just been introduced, receiving some great traction. Then the new venue being exclusively produced in the Pune plant, again, an opportunity. Then, of course, the beyond, which is which is coming in. So we believe that SUV contribution will continuously go up. At the same time, contribution is numerator divided by denominator. So I don't mind at all if if both my hatches and sedans as well as SUVs grow. So I think the whole idea is to continuously keep on growing the exports. Every country is exports from India. If you remember, about four years back, exports used to be 20% of our production. Last fiscal, we were at 24.5%.

33:47 We've already announced our intent to reach closer to 30%. So I think the opportunity... More opportunity or more headroom there is in the SUV segment. And also since so many new launches are happening, I think that that increases our opportunity. So, yes, so we... You will see continuously this percentage going up as we go along. Thank you. Thank you. And the second question is with CNG contribution increasing in EVs also being launched in next one or two years, how do you see the pickup among the different parting in next five years? How much would be the contribution from EV and hybrid and K and G versus petroleum diesel portfolio? So very difficult question, but we already announced that probably around... In the in the next four to five years, 50% of our portfolio will be green, including CNG, EV, and hybrids.

34:37 I would say equal equal equal plus minus 2% here and there is what my expectation is. You know? So this is where... This is I I I believe things. So we would like to be... You know, if if if... In fact, yesterday, I was in a conference where government representatives are also there. So they also said that probably by 2030, EVs in passenger vehicles should be around 15 to 17%. In fact, then some reports said 10%, but he said maybe it could be 15 to 15%. So we'd like to be higher than that. We would like to be higher than that, and that is how we are working on the entire ecosystem. You would have seen so many announcements from us on the charging ecosystem. Then localization, I already talked about, and, of course, the products also. So I think all these factors combined should help us to have a EV penetration higher than the higher than the industry in 2030. And, of course, hybrids will come also.

35:29 And and CNG, of course, we are increasing the portfolio. So equal equal equal division between the three is what we expect in probably, say, '30 to '32, 2032, 2032. Thank you. Okay. I will take our next question from the line of Pramod Kumar from UBS Securities. Please go ahead. Yes. Thanks a lot for the opportunity. My question is to Tarun. On the margin front, Tarun, your margin guidance effectively means that your second half margins will be north of 13% versus, say, 9.3% at the EBITDA this what we have had. So if you can just help us understand what are the things which you're seeing in terms of tailwind, which will help you get that margin level despite all the headwinds what we're seeing on the macro side. If you can just help us understand that, that will be really great, sir. That's the part... That's the first question.

36:21 Yeah. So we just calculated. In fact, I think we need not 13%, slightly above 12% to reach the 11% EBITDA. So that is the point number one, and that is what we are working for. And lot of positive tailwinds are there. First is, of course, as you know, the Tamil Nadu incentive starts from September last week. So quarter three and quarter four, both will have a very... Clearly more than 1% is the Tamil Nadu incentive, which clearly helps us in margin, number one. Number two, we mentioned about the double digit growth in exports. As you know, export margins are much, much higher than the domestic margins, and that really helps us to really, you know, improve our margins. Number three, like I said, the general consensus is that post the midterm elections, worst situation, maybe another three months, raw material, we should see some kind of a softening happening. So that should help. Number four, in September, we had a price increase. So that will reflect on the entire h '2 of next year. Number five, in January, we will...

37:21 We always have a price increase. So that will again give attraction. Number six, Chennai plant utilization, as as I mentioned, has gone down to less than 80% with the two new models coming in, the EV as well as the beyond Chennai plant, you know, that will help. Number seven, the venue third shift has started in, which means we will be much closer to the one seventy thousand third shift operation, which means there's an opportunity to to leverage the fixed cost and increase the margins. I think I've given you enough reasons. Maybe Harry can add if if if there's anything I will left. Harry, it's okay? Yeah. I think I think mister Tarun has already covered most of the things. Of course, I already mentioned about the cost saving activities. Localization continues to increase for us. We have shown the presentation as well. 82% last year. Now we're already at 84%.

38:11 I think these efforts also will continue to support for us on the margin front. Thank you, Bhoom. Yeah. So... And the second question is on the 50 plus countries. So probably it's one of one of the... It's only of the two production hubs for beyond in the globally. So just wanna understand, normally, we have such a very wide list or a very long list of countries. Is it fair to estimate that at least you should be clearing triple digit units per month per country to at least justify the cost in the investment? I'm just trying to understand the volume potential of beyond here. And I think given the success of venue and the kind of numbers you're talking about, when you ramp up as well. So is it fair to assume that beyond really a big volume for our product even for the international market and not only for domestic? Is that understanding right, sir?

38:58 Look. I mean, I think it's not so simple and, you know, the triple triple digit per country per month. I think then we'll need to... Maybe we'll make two more plans if beyond is doing so well in export market alone. So it's it's not so simple. At the same time, we understand we we have just launched the car two days back. Based on what, you know, last two years when the car was being developed, 50 countries have shown a great interest. Last two days, I've been receiving some very good messages from the distributors that, yes, they are very excited with the beyond. So please have some patience. I think by the time we finish this quarter, we will have much more clarity on the beyond. But it seems that, yes, the potential could be could be high and really help us to increase our further.

39:43 But to that number is a little bit premature at this stage. Thank you. Oh, no issue. Thanks a lot. Best of luck. Thank you. Thank you. We have a follow-up question from Gunjan Prykhani from Bank of America. Please go ahead. Yeah. Hi. Thanks for taking my question. Again, just two quick questions. First, on the price hikes, can you share what was the price hike effective taken in September and so far this fiscal year? And secondly, if you can also refresh us with the export market mix for the first half given that lot of new markets have... Are being added and, you know, we're seeing faster growth in LatAm. So, you know, you know, where does the market mix stand on the exports now?

40:36 So price hike in September was point 4%,. That's the average price take... And so far taken, Harry, in this? So far, we have taken about 1.4% in this calendar year since January. Okay. Got it. And second question, I think you were asking about market mix, right, in exports? Yes. So quarter two, if you see the mix was Middle East and Africa put together, 52% was a contribution, followed by Latin America, 26%, and Mexico was 20%.

41:23 So is it possible to break up Middle East and Africa? I think where the concern typically comes is that Middle East is pretty big. Right? I'm guessing that Africa is being also growing. Is it possible to to get that split? So Middle East, out of this 52%, Middle East is 34. Africa is 18. Got it. Alright. Thank you so much. Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone. We have a question from from CLSA.

42:14 Please go ahead. Yeah. Hi, sir. Thanks. A couple of things. I missed out in case you said from Q3 perspective over Q2, what is the raw mat basket inflation you are seeing now? We are seeing what we said was that probably not they should not go up. The... It should not go up. Some precious metals are going down. Copper is going up. So net net, frankly speaking, it should be either flat or maybe slightly on the negative side only on a sequential basis. Thank you. And similar to what other PV makers are also saying, what's your view on the safeguard duty, let's see price moving up?

43:02 Is the automotive body doing anything, asking government to take care of that, which is in... A big part of your enrollment inflation. So, look, yeah, of course, we... All these issues are being discussed at the same level, and same is discussing with the government. I think we we respect that, and and hardly... The impact is so far on the safeguard duty is not much because we have localized big time in the last three to four years on steel especially. So not such a big impact. And Sam is discussing with the government on the future course of action and discussions and all. So that is a very regular process, you know, before the budget. Government is always taking feedback from. In fact, I attended a meeting last week of, and normal consultation process is on. Thank you.

43:49 Sure. And last thing, what is the update on the 3,000,000 project with TBS? Yeah. So it's on track. I think we had the Pune plant inauguration, and we mentioned about the... We gave an update on that. So everything's on track. And at the right time, we will announce, you know, the the the timelines exactly for the launch, etcetera, etcetera. In the... Meanwhile, of course, we did... As you know, that we have done kind a of a concept testing and with some very, very good results. So at the right time, we'll announce more about the civil projects, but it is on track. It is as per plan. Thank you. But would it be right to assume it will be launched sometime in fiscal twenty eight? Please wait for that. I mean, we will make the announcement. So Sure. Just wait for that because I don't want to have a premature announcement.

44:41 You know? It's... Because so many parties are involved. There's a TVS which is involved. There's a HMC which is involved. So not fair for me to, you know, jump the gun. Okay? Yeah. Thank you. Thank you. We'll take that as the last question for today. I now hand the conference over to mister Vivek Kumar from ICIC Securities for closing comments. Over to you. Thank you,. We thank all the participants for joining this evening. Thank you for your time, and have a good day. Thank you. On behalf of the management of Hyundai Motor India Limited, I thank you all for joining the call. You may now disconnect your lines. Thank you.