Hyundai India's Q4 Profitability Faces Challenges Amidst Sluggish Sales Performance and Market Slowdown.
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Hyundai Motor India (HMIL) is bracing for potential headwinds in its Q4 financial performance, with analysts anticipating a possible dip in profits due to stagnating sales and increased competition. The company, which recently listed on the Indian market in October of last year, faces scrutiny from independent investors who hold roughly 17% of the company's shares. The pressure is on as HMIL prepares to announce its earnings for the January to March quarter on May 16, 2025.

Challenges and Market Dynamics

Two primary challenges confront Hyundai Motor India: sluggish sales and intensifying competition within the Indian automotive market. In fiscal year 2025, HMIL's sales experienced a decline of 0.6%, totaling 559,149 units. This contraction puts pressure on the company as it strives to maintain its position as the second-largest carmaker in India.

The competitive landscape is becoming increasingly fierce, with domestic auto giants Mahindra & Mahindra and Tata Motors vying for the second spot on the sales podium. Mahindra & Mahindra recorded a notable surge in sales, with a 20% increase to 512,626 units, while Tata Motors experienced a slight decline of 0.7% to 535,960 cars in FY25. In April 2025, Hyundai slipped to fourth position with 44,314 passenger vehicle sales, while Mahindra leaped to second with 52,330 PV sales.

The overall passenger vehicle (PV) segment in India has seen moderate growth. Dispatches to dealerships edged up by 2.6% year-on-year to 4.34 million units in FY25, impacted by weak urban demand, a high base effect, and declining sales of hatchbacks and sedans. The Society of Indian Automobile Manufacturers (SIAM) had initially projected a growth of 3-4% for FY25, but the actual figure settled at 2.6%.

Financial Performance and Investor Expectations

Since its listing, Hyundai's stock has seen limited gains, with the market gaining only 0.5%. Despite this, the company has outperformed the broader Nifty Auto index, which has posted a 4% decline since Hyundai's listing. Renewed optimism surrounds Hyundai Motor India's shares, driven by expectations for its Q4 earnings.

However, the company's recent financial performance has been mixed. Hyundai Motor India's total revenue for Q3FY25 declined by 1.3% to ₹16,648 crore, compared to ₹16,874 crore in the same period last year. The EBITDA for the quarter also saw a decrease of 13.7% year-on-year, falling to ₹1,875 crore.

Factors Influencing Sales and Profitability

Several factors have contributed to the current challenges. Sluggish urban demand, the high base effect from the post-COVID recovery period, and weak sales of hatchbacks and sedans have all played a role. Supply chain disruptions caused by heavy snowfall in Korea also negatively impacted sales in the region.

Despite these challenges, SUVs continue to be a strong point for Hyundai Motor India, accounting for a significant portion of its sales. In FY25, SUVs contributed to 68.5% of the company's domestic market sales, with 410,086 units sold, marking a 5.5% increase over the previous year. The Creta SUV, including the new Creta Electric, has been a key growth driver, with total sales of 194,871 units in FY25, a 20% year-on-year increase.

Strategic Outlook

Looking ahead, Hyundai Motor India is focusing on several strategic initiatives to bolster its market position and drive future growth. The company is investing in electric vehicle (EV) exports, with plans to launch the e-Vitara in 2025-26. HMIL is also undertaking a revamp of its Chennai plant and establishing a new facility in Talegaon, Maharashtra, with a $6 billion investment in India over 29 years. These investments aim to enhance the company's supply chain and production capabilities.


Writer - Devansh Reddy
Devansh Reddy is a driven journalist, eager to make his mark in the dynamic media scene, fueled by a passion for sports. Holding a recent journalism degree, Devansh possesses a keen interest in technology and business innovations across Southeast Asia. He's committed to delivering well-researched, insightful articles that inform and engage readers, aiming to uncover the stories shaping the region's future. His dedication to sports also enriches his analytical approach to complex topics.
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