Hyundai Motor India Loses Nearly 24% of Profits Despite Revenue Growth

Hyundai Motor India posted a net profit after tax of 11.96 billion rupees (around $125.65 million) for the second quarter ended September 30 — a 24% drop from the 15.72 billion rupees recorded in the same period last year. The number stings.

Cost Pressure Eats Into Hyundai Margins

Total expenses jumped 24% to 193.02 billion rupees, driven mainly by higher costs of raw materials consumed in production. Steel and copper prices surged in the Indian market amid fallout from the Middle East crisis this year. That hit profit margins head-on. Indian automakers have been battling these pressures for months.

Yet operating revenue moved the other way. Hyundai grew total revenue to 206.96 billion rupees versus 174.61 billion rupees in the year-ago period. Vehicle demand benefited from tax cuts approved last year, which supported sales and boosted buying sentiment. The company's stock rose 1.3% to 1,886.7 rupees by 3 pm local time on Wednesday.

Second-Half Headwinds Coming

What awaits automakers in India during the second half? Analysts expect year-on-year sales growth to slow, with companies struggling to match the rates posted in the same period last year. Tax cuts were the primary demand driver back then — a factor that won't repeat with the same force.

Pressure on Hyundai prices and those of rival brands won't stop at raw materials alone. Elevated production costs pose added challenges for companies trying to hold market share in one of Asia's largest auto markets. The short-term result will show up in profit margins more than sales volumes.

Investment in new cars within the Indian market remains a priority for Korean automakers betting on strong domestic demand to offset global cost pressures. Hyundai specifically faces a tough equation between keeping prices competitive and protecting its profits.