New Delhi: In a tale of contrasts, India’s second-largest carmaker (M&M) reported double-digit surge in revenue and profit in the April-June quarter, while fourth-placed saw revenue growth stall and net profit fall sharply, even as M&M further cemented its lead over the Korean major in terms of vehicle sales.
M&M’s consolidated net profit rose 37% year-on-year (y-o-y) to ₹5,998 crore while revenue grew 28% to ₹58,187 crore. In contrast, Hyundai’s revenue declined 0.5% to ₹16,334 crore while profit after tax fell 35% to ₹889 crore.
M&M and Hyundai are the first among listed passenger vehicle makers to report April-June results. Tata Motors and Maruti Suzuki India are scheduled to announce their earnings over the next fortnight.
Both companies cited higher commodity costs following theas a drag on margins. Hyundai’s Q1 performance was further hit by a June fire at a key supplier, Mobis, which disrupted production at its Chennai plant.
M&M’s growth was aided by better-than-expected performance of rural markets despite the threat of El Niño and strong growth in its so-called ‘growth gems’ — real estate, components, vehicle recycling business Accelo, and logistics business. Its financial services business also saw 78% growth in profitability, which helped boost consolidated profits for the company.
Tarun Garg, managing director and chief executive at Hyundai India, said the quarter was a challenging one, but the company has already set out to recover the lost momentum.
“Our rural contribution reached an all-time high of 26% in the quarter. Supported by production normalization, strong demand momentum, upcoming festive season and our planned product launches, we expect to bounce back strongly in the coming quarters and deliver our stated growth guidance for 8-10% volume growth for fiscal 2027,” Garg said during a media briefing on the company’s results on Thursday.
Anish Shah, M&M’s group chief executive, said at a media conference the same day that fears of severe impact of El Niño on rural demand has not materialized yet, with market growth remaining strong.
The top executive also highlighted that the growth came despite commodity inflation pressure, and production constraints due to labour shortages and West Asia war-related disruption.
“Given what we see right now, we will see some uncertainties that come and we will see inflation holding for some time. But also as we saw as the war eased off, aluminium dropped 22% in literally 8-12 days. So, that will happen as well. And given that in the short run we are able to absorb the impact, we do not have to worry about it,” Shah said.
“We now see a 3x profit growth for growth gems and that really brings all our engines firing on all cylinders,” Shah noted.
The fate of both the companies also diverged in terms of sales growth, with Hyundai facing headwinds on its exports to West Asia as well, even as M&M continued to cement its lead over Hyundai as India’s second-largest carmaker.
M&M’s overall passenger vehicle sales—it sells only sports utility vehicles (SUVs)—rose 15% to 175,000 units in the first quarter. Tractor sales grew 18% to 158,000 units, and electric vehicle penetration in its SUV sales increased to 12% from 7.8% in the year-ago period.
On the other hand, Hyundai India saw domestic sales rising 5% to 139,374 units. International sales fell 20% to 38,708 units in Q1 owing to the West Asia-related disruption, pulling down overall vehicle sales by 1.3%.
Garg noted that the company has recovered all the production lost owing to the disruption at its plant in June, and is also focusing on revving up export growth as it explores new markets for its compact SUV Venue.
“The underlying fundamentals of our export business remain extremely strong. We continue to maintain a healthy order backlog across key markets and customer demand remains robust. The new Venue continues to receive encouraging responses in export markets as well,” Garg said.
M&M’s management noted that the company remains optimistic about growth prospects in the domestic market as it focuses on adding new capacity at its plants.
The company is looking to improve its capacity from 64,500 vehicles every month at the end of March to 68,000 by the end of September. By the end of this financial year, it wants to increase capacity to 82,000 vehicles every month.
“We can accelerate the EV volume growth even further based on the demand we are seeing in the marketplace, and we are increasing capacity,” Shah noted during the results presentation.
Both Hyundai and M&M saw their shares surge during trading hours when they released their results. Hyundai’s shares rose 2.3% and M&M’s 2.26% on the National Stock Exchange (NSE), against benchmark Nifty Auto’s 1.63% gain.
