Hyundai Sets Quarterly Sales Record at 219,072 Vehicles as Consolidated Profit Falls
Key Facts
Hyundai Motor India announced its second-quarter and first-half results for fiscal 2026-27 on October 28, reporting record quarterly sales of 219,072 units. The company said sales rose 15% year on year and 23% from the previous quarter, while consolidated revenue climbed to 206,961 million rupees from 174,608 million a year earlier. But profit after tax fell to 11,962 million rupees from 15,723 million in the year-earlier period. The results showed a widening gap between sales growth and cost pressures on earnings. The CEO said, "Elevated commodity costs affected the quarter's profitability," adding that the company expects faster momentum in the second half.
Earnings before interest, taxes, depreciation and amortisation fell to 19,745 million rupees from 24,289 million a year earlier, while the EBITDA margin dropped to 9.5% from 13.9%. The figures reflect the impact of higher input costs on the company's ability to convert sales into profit, despite setting a record for units sold. In the second quarter of the previous fiscal year, net profit grew 14.3% year on year to 15,723 million rupees, with an EBITDA margin of 13.9%. That lifted the comparison base for the current quarter, in which profit and margin were below year-earlier levels. Reuters reported that expenses rose 24% to 193.02 billion rupees in the quarter ended September 30, driven by the cost of materials consumed.
An investor relations official said raw material cost inflation reduced margins by about 400 basis points year on year and about 250 basis points from the previous quarter. Copper and plastics were trending higher, the official said, while precious metals were moving lower, leaving the trajectory of material costs unclear. The official said the company had offset part of the impact through localisation, value engineering and cost-saving initiatives, as well as price increases implemented during the year. Indian automakers faced higher steel and copper prices amid the Middle East crisis, according to Reuters. The report said favourable tax cuts in the previous year supported demand, making year-on-year comparisons in the second half more challenging after they lifted demand in the comparable period.
The company's growth was supported by a 19% year-on-year and quarterly increase in domestic market volumes, and rural sales penetration reached 26.6%, the company's highest level, according to its statement. CNG vehicles also accounted for a record 19.1% of quarterly sales. Exports grew 4% year on year and 38% from the previous quarter, despite geopolitical challenges. On seasonal demand, Tarun Garg said the company's sales during Shradh and Navratri rose 31%, while sales during Ganesh and Onam increased 75%. He added that continued raw material pressures could require a significant price increase and weigh on demand, putting efforts to protect volumes and margins to the test.
Analysts differed in their assessment of the company's ability to regain momentum. Morgan Stanley maintained its Overweight rating and set a price target of 2,438 rupees, expecting a sharp recovery in volumes, margins and market share in the second half of the fiscal year. Jefferies, by contrast, maintained its Underperform rating and a price target of 1,630 rupees. NDTV Profit reported that Jefferies had flagged a decline in domestic market share to 12% and intensifying competition in SUVs. The divergence reflects differing bets on whether the expected recovery and new product cycle can counter margin pressures and competition.
In the October 29 session, the stock rose about 6% to an early high of 1,973.80 rupees, compared with a previous close of 1,866.90 rupees, before paring some gains, according to Upstox. The company tied its outlook to an acceleration in activity in the second half and said it is targeting domestic sales growth of 8% to 10% year on year, against expected industry growth of 5% to 5.5%. An investor relations official said the company would monitor commodity trends and take the necessary measures to protect volumes and margins. It also plans to launch a mass-market electric vehicle in the fourth quarter of fiscal 2026-27, while saying the Bayon launch marks the start of a new product cycle. More challenging year-on-year comparisons and input costs remain among the factors that will accompany the execution of these plans.