Hyundai Motor India profit falls 23.9% to 1,196 crore rupees despite sales growth
Key Facts
Hyundai Motor India reported a 23.9% decline in net profit to 1,196 crore rupees in the second quarter of fiscal 2027, ended September 30, compared with 1,572 crore rupees in the year-earlier period, according to results reported by NDTV Profit. The fall came despite an 18.5% increase in revenue to 20,696 crore rupees from 17,460 crore rupees a year earlier. Tarun Garg, managing director and chief executive, said the quarter marked an important milestone for the company, as quarterly revenue exceeded 20,000 crore rupees for the first time since its establishment. He said, however, that higher commodity costs pressured profitability. The results reflect a widening gap between growth in sales and revenue on one hand and declining profit on the other.
Pressure extended to operating profit, with earnings before interest, taxes, depreciation and amortization falling 18.7% to 1,974 crore rupees from 2,428 crore rupees in the same quarter of the previous fiscal year, according to NDTV Profit. Net profit and revenue also came in below estimates in a CNBC-TV18 poll, which forecast net profit of 1,263 crore rupees and revenue of 20,789 crore rupees. Revenue thus exceeded 20,000 crore rupees for the first time, but remained below the estimate issued before the results announcement. The company said elevated commodity costs affected profitability during the quarter. It added that operating leverage, an improved sales mix and cost-reduction initiatives helped improve the operating profit margin compared with the previous quarter.
The company recorded its highest-ever quarterly total sales at 219,072 units during the quarter, up 15% year on year and 23% from the previous quarter, according to the Financial Express. Domestic sales grew 19% year on year, while rural penetration reached a record 26.6%. Compressed natural gas vehicles accounted for a record 19.1% of sales. The figures show business activity expanding alongside revenue growth, at a time when that expansion did not translate into a comparable increase in net profit. The company attributed weaker profitability to higher commodity costs, while crediting operating leverage, sales mix and cost-reduction initiatives for the quarterly improvement in margin.
In the first half of fiscal 2027, net profit fell 29% to 2,072 crore rupees from 2,906 crore rupees in the year-earlier period, while revenue rose 9% to 36,056 crore rupees from 33,086 crore rupees, according to data reported by Upstox. That places the quarterly result within a period of revenue growth accompanied by a steeper contraction in profit. In a statement reported by the platform, Garg said the quarter combined record volumes with revenue exceeding 20,000 crore rupees for the first time since the company was established, adding: "But elevated commodity costs affected the quarter's profitability." After its first-quarter results, the company had maintained its guidance for domestic sales volume and exports to grow between 8% and 10% in fiscal 2027. It also targeted an earnings-before-interest,-taxes,-depreciation-and-amortization margin of between 11% and 14% for the same fiscal year.
Regarding the next steps, Garg said the company is ready to launch a mass-market electric vehicle in the fourth quarter of fiscal 2027. On monthly sales, Hyundai said its combined domestic sales and exports totaled 77,916 units in September 2026, up 10.8% year on year and the highest monthly level since its establishment. The total included 57,166 vehicles sold domestically, an increase of 10.9%, and 20,750 units exported, up 10.4%. In the context of India's industrial data, the Ministry of Statistics said the industrial production index grew 8.0% in August, compared with 6.7% in the initial July estimate. The ministry had scheduled the release of the September index estimate for October 28, 2026.