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The crisis in the Middle East has created this uncertainty for an automobile industry that was already dealing with volatile input costs. Higher commodity prices such as copper and steel have pushed expenses related to manufacturing, thereby squeezing profitability even as demand remains strong.
Also Read: Hyundai Motor India to hike production capacity to 1.14 mn units by 2030, boost localisation
The company reported a profit after tax of Rs 1,196 crore for the quarter ended September 30, down from Rs 1,572 crore a year ago. Total revenue from operations, however, gained to Rs 20,696 crore from Rs 17,461 crore, crossing the Rs 20,000-crore mark for the first time in a quarter since the company began operations in India.
Expenses climbed 24% to Rs 19,302 crore, led by higher costs of materials consumed, outpacing revenue growth and weighing on profitability.
Demand remained strong, reflecting continuing tailwind from last year's favourable GST cuts, which helped lift vehicle sales and aided revenue. However, the benefit of rising volumes and revenue was not enough for the carmaker to counter the pressure from rising costs. Hyundai said operating leverage, a healthy product mix and cost-cutting moves have helped improve its EBITDA margin sequentially, offering some relief against the commodity headwinds.
"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," the company said in its earnings report.
Also Read: Hyundai reveals ambitious plan at new Bayon launch; Creta to be part of big push as well
Hyundai India's operations for the second half depends on its new product launches and sustained demand, though it will face a tougher year-on-year comparison as tax cuts had boosted vehicle sales last year. Analysts, as cited by Reuters News, 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 underscoring the pressure on automakers from rising costs.
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