Hyundai's margin woes persist

Hyundai Motor India Ltd's lukewarm stock market debut in October was followed by an equally underwhelming maiden quarterly performance.

- Abhinaba Saha

A key disappointment was the 70 basis point (bps) sequential drop in operating margin to 12.8% in the September quarter (Q2FY25). Lower domestic and export volumes, coupled with higher discounts, weighed on profitability. The decline was exacerbated by a high base effect, as Hyundai's Ebitda margin had peaked at 13.5% in Ql FY25-the highest in four years. To stimulate demand, Hyundai raised retail discounts by 40 bps to l.9% in Q2FY25. However, this failed to boost sales volumes, which remained flat quarter-on-quarter, dragging margins lower. As a result, net profit fell nearly 8% sequentially to ₹l,376 crore in Q2F Y25. A concern is that Hyundai's profitability might remain under strain in Q3FY25 as well. Deep discounts and subdued wholesale volumes could further squeeze its Ebitda margin. While the management expects steady demand driven by higher SUV (sports utility vehicle) sales and the wedding season in November, weak industr