On export outlook and guidance - are you changing guidance or maintaining the 6-7% guidance for full year exports?
We are seeing very good demand for our products across different geographies. Even if you look at this quarter, for example, markets like Africa, we had seen a growth of 28%, Mexico we had seen a growth of 14%. We expect that the momentum should continue in the near future. But one thing we need to understand here is that there is also a seasonality factor, because normally what happens is, export for us, generally it is better in first half of the financial year as compared to the second half. So, considering that, we would like to keep the guidance at the similar level what we had indicated during last earnings.
What is the capex and margin guidance for FY26? How is Pune plant going to affect profitability?
We have planned for a capex of around INR7,000 crores in the financial year'26. For margins, with the commencement of Pune plant from Q3 financial year'26, additional depreciation amid low-capacity utilization in the initial period, may weigh on near-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.
On the competitive landscape and pricing - are competitors offering discounts that Hyundai needs to match?
In a highly competitive landscape, with heightened price pressures, we closed the quarter with a strong EBITDA margin of 13.3%. This resilience was driven by 'Quality of Sales', enhanced focus on boosting exports and disciplined cost control measures. We have not compromised on quality of sales despite competitive pressure.
What are your thoughts on the festive season outlook given weak demand so far?
Overall demand scene so far looks sluggish. In fact, June was the lowest TIV in the last 30 months if you leave aside December. So, this was not very good. But at the same time, we are now entering the festival. So, we have every reason to believe that the worst is behind us. Also, interest rates, although 100 basis point interest rate has been cut by RBI this year, I believe the effect to the customer is still being passed.
Is export gross margin 700-800 basis points higher than domestic?
If you look on a sequential basis, there are two important factors here. One is higher export mix. Apart from that, we also had material cost optimization. Basically, what we are doing is we are continuously working for improving our localization and other cost optimization efforts. So, that also helped us with better gross margins during this quarter. On a year-on-year basis, one is export mix plus the material cost optimization. Apart from these, we also had better model mix in domestic during the quarter plus the price increase which we did in January this year.
On demand conditions - region-wise color, rural versus urban, CNG and CRETA EV adoption?
Kapil, clearly the rural contribution continues to go up. In quarter one, we had a rural contribution of 22.6%. And for your reference, last year, same quarter, it was 19.9%. And for the last full financial year, it was 20.9%. So, very clearly, you can see that, there is a clear shift in demand towards rural markets. On the CNG front, again, like MD mentioned in his opening comments, this was the highest ever CNG contribution quarter for us. If I go model by model, I would like to tell you that Aura CNG contribution was 89%, EXTER CNG contribution was 30%, NIOS CNG contribution was 18%. These three models put together, CNG contribution was 46%. And when you compare this with quarter one of last year, it was 33%. So, from 33%, we have moved to 46%.
On material cost reduction - areas and potential number for next 1-2 years?
If you look on the material side, first of all, last quarter, the commodity for us was more or less stable. There are two things here. One is, we are continuously improving our localization level. If you look at the number, a year back in financial year '24, the localization level was somewhere around 78%. Within a matter of a year, we have significantly improved this number to nearly 82% now. So, clearly, we are reaping the benefits of our localization efforts in the current period. Apart from that, at the plant level, we also do some value engineering activities.
On rural demand trends - what is Hyundai discovering as SUV demand continues strong even in rural markets?
Very, very clearly, to answer your question, rural SUV penetration today stands at 68.8% for me. I never expected that rural will come out of small cars. But that said, if you see 2015, frankly speaking, SUVs used to contribute 13% to the overall sale. In fact, before 2014, it was 9%. So, actually, there's a paradigm shift across and rural has really caught up very, very fast. And today, rural customers have also become aspirational. I think one key reason for that is that the road infrastructure has improved tremendously.