Hyundai Motor India reported a nearly 24 per cent year-on-year decline in net profit for the second quarter (Q20 amid rising raw material costs that weighed on earnings despite witnessing a strong revenue growth and resilient vehicle demand. The automaker’s profit after tax fell to ₹1,196 crore in the quarter ended September 30, compared with ₹1,572 crore in the same period in 2025.
Revenue from operations, however, rose to ₹20,696 crore from ₹17,461 crore, crossing the ₹20,000-crore mark for the first time in a quarter since the company began operations in India.
According to Tarun Garg, Managing Director and Chief Executive Officer, the quarter was a milestone, pointing to the record volumes and the revenue crossing ₹20,000 crore for the first time since the company's inception, while acknowledging that elevated commodity costs had weighed on profitability.
Total expenses climbed 24 per cent to ₹19,302 crore, driven by higher costs of materials consumed. The increase outpaced revenue growth, putting pressure on profitability.
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The uncertainty stemming from the conflict in the Middle East has added to the challenges in the automobile industry, which is already dealing with volatile input costs. Higher prices of commodities such as copper and steel have raised manufacturing expenses, squeezing margins even as demand remains firm.
GST Cuts Support Demand; Cost Pressures Persist
Vehicle demand has remained strong, supported by the favourable GST cuts introduced last year, which helped lift sales and boost revenue. However, higher volumes and revenue were not enough to offset the impact of rising costs.
According to Hyundai, operating leverage, a healthy product mix and cost-cutting measures had helped improve its EBITDA margin sequentially, providing some relief from commodity price pressures.
Momentum Likely In Second Half
In its earnings report, the company said it expected business momentum to accelerate in the second half of the financial year, with new product launches expected to play a key role.
"Looking ahead, we see H2 as a period of accelerated momentum for us. Launch of Bayon marks the onset of our golden product cycle. We are also fully geared up for the launch of dedicated mass market EV in Q4 FY27. While macro-economic uncertainties and cost pressures persist, we remain focused on strengthening our leadership across key segments, delivering sustainable growth and profitability," Hyundai said in its earnings report.
Hyundai’s performance in the second half will depend on its upcoming launches and the continuation of strong demand. However, the company will face a tougher year-on-year comparison as last year’s tax cuts had boosted vehicle sales. Analysts cited by Reuters expect this base effect to become more pronounced in the coming months.
Hyundai’s results follow those of market leader Maruti Suzuki, which reported a smaller-than-expected quarterly profit on Tuesday, also highlighting the pressure rising costs are placing on automakers.
