Hyundai India profit falls for second year as competition, costs weigh
Hyundai Motor India Ltd’s (HMIL) annual profit fell for the second consecutive financial year after its listing in October 2024, as domestic sales declined amid fierce competition and higher costs linked to the West Asian war hurt performance.
In the process, it handed over its position as the country’s second largest automobile manufacturer after Maruti Suzuki India Ltd to Mahindra & Mahindra Ltd (M&M), which it had held since 2009.
The company has announced capital expenditures so far ₹7,500 crore for the ongoing financial year to expand production capacity and support the launch of new models, it promised to quickly regain the second position.
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Hyundai India’s profits fell for the second year in FY26 as domestic sales fell due to intense competition and higher costs, worsened by the West Asian war affecting exports. This led to a 4% decline in net profit to ₹ 5,432 crore and a 50 basis point hit to margins.
Rising commodity prices and increased discounts offered to counter intense competition from rivals such as M&M and Tata Motors have hurt profitability. Additionally, the West Asian war also affected export performance, especially to the Middle East.
Domestic sales fell 2.3% in FY26 to 584,906 units. However, there was a significant increase in exports of 16% to 190,125 vehicles, which contributed significantly to the total revenue growth of 2% to ₹70,763 crore.
Hyundai India has announced a capital expenditure of ₹ 7,500 crore for the current financial year to expand production capacity and launch new models. The company aims to regain its second position by focusing on domestic market growth, supported by GST cuts and new vehicle launches.
The West Asian war had a negative impact on Hyundai India’s exports to the Middle East region. To alleviate this, the company is aggressively focusing on other markets such as Latin America and Mexico and continually strengthening its product offerings abroad.
“We intend to get back to the number 2 position… We are very passionate about our position. And we will get it back as soon as possible,” Hyundai India Managing Director (MD) and Chief Executive Officer (CEO) Tarun Garg said in a press conference on Friday.
Gurugram-based Hyundai’s consolidated net profit fell by 4 percent ₹Margins took a 50 basis point hit to ₹5,432 crore, finishing fiscal 2026 at 7.6%, the company said. M&M and Tata Motors Passenger Car Ltd. Increasing commodity prices and high discounts due to intense competition with domestic competitors such as , damaged Hyundai’s profitability.
The company’s annual revenue increased by 2 percent ₹Overall sales increased 1.7% to 775,031 units for the fiscal year ending March 31, 2026. Most of the growth came from exports, which rose 16% to 190,125 vehicles during the year, despite domestic sales falling 2.3% to 584,906 units.
Hyundai Motor fell below second place in the domestic automobile market for the first time since fiscal 2009. Tata Motors Passenger Cars also overtook it, relegating the company to fourth place at the end of FY26.
Hyundai’s performance lagged behind Maruti and Mahindra, which announced their results in the past two weeks. Maruti’s FY26 consolidated revenues up 20% ₹Net profit increased by 1% to 1.83 trillion ₹14,679 crore. Mahindra’s revenue increased 26% YoY ₹1.98 trillion in 2025-26, with net profit up 32% ₹18,621 crore. Tata Motors PV is yet to announce its results.
Hyundai’s shares closed with an increase of approximately 1 percent ₹1,852.45 on BSE on Friday.
The Indian arm of the Korean automotive industry now expects domestic sales to grow by 8-10%, helped by the GST cuts last September and the launch of two new models – an internal combustion engine and an electric vehicle. However, export growth is expected to slow down to 8-10% as war clouds in West Asia hover over the sector.
“FY26 was a year of two distinct phases for the automobile industry, driven by change in policy and demand dynamics. The first half was largely underwhelming, primarily due to muted customer sentiment,” Garg said.
“However, the landscape changed meaningfully in the second half following the rationalization of GST rates in September, which acted as a strong catalyst for the recovery,” he added.
While sales recovered in the second half of the year, its profitability took a big hit in the January-March quarter of 2026. According to data announced by the company, net profit decreased by 22% on an annual basis in this quarter. ₹1,256 crore.
Profit margins fell by more than 2 percent to 8.9 percent in the fourth quarter due to the impact of inflation in commodity prices. Revenue increased by 5 percent ₹18,916 crore.
Although the company aims to grow aggressively in the domestic market, it expects some moderation in exports, which account for about a quarter of its total sales.
Investor relations officer KS Hariharan said, “We saw a growth of over 16 percent in exports. However, we know the situation in the last quarter and what happened after the war. Therefore, our exports to the Middle East geography were affected.”
“We were looking at several reduction plans here. First, we have aggressively focused on other markets. For example, even in the last quarter we increased our shipments to markets like Latin America, Mexico and others,” Hariharan said.
“This has helped us minimize the impact of the Middle East issue. We are also constantly trying to strengthen our product offerings in overseas markets,” he added.
