Hyundai India Q2 2024 Financial Results: Net Profit Falls 16% to Rs 1,375 Crore
Hyundai Motor India Ltd (HMIL) released its financial performance report for Q2 FY2024, revealing a notable decline in profit amid challenging market conditions. The company’s net profit for the quarter ending September 30, 2024, stood at Rs 1,375 crore, representing a 16% year-on-year (YoY) decrease from Rs 1,628 crore in Q2 FY2023. Factors like declining domestic sales, geopolitical pressures, and reduced exports were among the significant contributors to this downturn.
Revenue and EBITDA Performance
For Q2 FY2024, HMIL reported consolidated revenue from operations amounting to Rs 17,260 crore, marking a 7.5% YoY decrease compared to Rs 18,660 crore in the corresponding period last year. Additionally, the company’s Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) registered at Rs 2,205 crore, a 10% decline from Rs 2,440 crore in Q2 FY2023. Operating margins also experienced a slight compression, narrowing by 30 basis points to 12.8% from 13.1% in the same period last year.
Unsoo Kim, Managing Director of HMIL, attributed the challenges to prevailing market conditions but underscored the company’s efforts to retain profitability through stringent cost control measures. “Despite the sluggish market conditions, we have successfully maintained profitability in H1 FY 2024-25, largely due to our proactive and continuous cost control measures,” stated Kim.
Decline in Passenger Vehicle Sales
Hyundai India witnessed a dip in its total passenger vehicle sales for Q2 FY2024, with a total of 1,91,939 units sold. The domestic market accounted for 1,49,639 units, representing a 5.75% YoY decrease. Export volumes also contributed to the total, with 42,300 units shipped during the quarter. This reduction in vehicle sales underscores the overall market slowdown that has impacted both local and international automotive demand.
Strategic Shift: Upcoming Launch of Creta EV
As Hyundai India navigates the current challenges, the company is gearing up for a strategic shift by entering the electric vehicle (EV) market with the anticipated launch of the Creta EV. Expected to be a “game changer” in the EV segment, the Creta EV aims to tap into the growing demand for sustainable and eco-friendly vehicles in India. Hyundai India is optimistic that the introduction of an EV model will cater to the rising customer interest in electric vehicles while enhancing its market competitiveness in the near term.
The company’s decision to launch an electric version of its popular SUV Creta could strengthen its standing in the Indian automotive market, especially as consumers shift towards more environmentally conscious options. Kim expressed optimism, stating, “We will be launching the Creta EV for the mass market in the coming months and expect it will be a game changer in the EV market.”
Hyundai’s Future Outlook: Balancing Volume and Profitability
Looking ahead, Hyundai India remains committed to balancing market share and profitability. The company emphasized its focus on quality growth by maintaining an optimal equilibrium between volume, market share, and margins. Despite a challenging quarter, Hyundai anticipates that demand will continue to rise over the mid- to long-term horizon.
The company’s vision is geared toward sustaining demand momentum in India’s automotive industry, even amid prevailing market pressures. Hyundai India is optimistic that its strategic initiatives, such as the upcoming Creta EV, will drive sustainable growth and help the brand remain resilient against fluctuations in the automotive sector.
Conclusion
Hyundai India’s Q2 FY2024 results reveal the company’s resilience in the face of fluctuating market dynamics. While net profits and revenue showed a decline, Hyundai’s proactive cost management and a robust strategy for entering the EV segment indicate promising growth prospects. The forthcoming Creta EV is expected to play a significant role in Hyundai’s roadmap, appealing to the Indian consumer’s growing interest in sustainable automotive options.
As Hyundai navigates these challenges and opportunities, it will continue to focus on balancing growth, market share, and profitability—positioning itself for sustained success in India’s competitive automobile market.
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