Hyundai Motor India Q1 FY27 profit falls 35% to ₹889 crore on rising costs
Synopsis
Hyundai Motor India's Q1 FY27 profit more than halved the market's comfort zone — net earnings fell 35% to ₹889 crore even as revenue barely moved, exposing just how badly a surge in employee costs and other expenses hit the bottom line. With EBITDA margin down 400 basis points and the CEO flagging 'multiple headwinds', the real question is whether Q2 can deliver the recovery management is promising.
Key Takeaways
Hyundai Motor India reported a 35 per cent YoY drop in net profit to ₹889 crore in Q1 FY27 , down from ₹1,369 crore in Q1 FY26.
Revenue from operations was nearly flat at ₹16,335 crore versus ₹16,413 crore a year ago.
EBITDA fell 31 per cent to ₹1,511 crore ; EBITDA margin contracted to 9.3 per cent from 13.3 per cent .
Employee benefit expenses surged 20 per cent to ₹749.02 crore , leading the cost increase.
Total expenses rose 4.2 per cent to ₹15,407.35 crore ; basic EPS fell to ₹10.94 from ₹16.85 .
CEO Tarun Garg projected recovery from Q2 FY27 , citing production normalisation and new product pipeline.
Hyundai Motor India Limited reported a 35 per cent year-on-year decline in consolidated net profit for the first quarter of FY27, as higher employee and operating costs eroded earnings even as revenue held broadly steady. The automaker posted a net profit of ₹889 crore for the quarter ended 30 June 2025, down sharply from ₹1,369 crore in the same period last year.
Revenue Holds, Profits Collapse
Consolidated revenue from operations came in at ₹16,335 crore, nearly flat compared to ₹16,413 crore in Q1 FY26 — a marginal dip of less than 0.5 per cent. The near-stagnant topline, however, masked a significant deterioration in profitability ratios. The net profit margin narrowed to 5.4 per cent from 8.3 per cent a year ago, while the profit-before-tax margin contracted to 7.4 per cent from 11.3 per cent.
Profit before tax fell 34.9 per cent to ₹1,201.65 crore from ₹1,847.20 crore, and basic earnings per share dropped to ₹10.94 from ₹16.85 in the year-ago quarter.
Operating Performance Weakens Sharply
EBITDA declined 31 per cent year-on-year to ₹1,511 crore from ₹2,186 crore, while the EBITDA margin contracted to 9.3 per cent from 13.3 per cent — a compression of 400 basis points. This marks one of the steeper quarterly margin contractions the company has reported in recent memory.
Cost Pressures Drive the Decline
Total expenses rose 4.2 per cent year-on-year to ₹15,407.35 crore, up from ₹14,780.47 crore. The breakdown reveals a broad-based cost increase across categories. Employee benefit expenses surged 20 per cent to ₹749.02 crore, while other expenses climbed 10.6 per cent to ₹2,213.98 crore. Depreciation and amortisation expenses rose 5.5 per cent to ₹557.10 crore. The cost of materials consumed increased a relatively modest 0.5 per cent to ₹11,894.76 crore.
Other income grew 27.7 per cent to ₹274.37 crore, but the gain was insufficient to offset the cumulative drag from higher operating costs.
What the Management Said
Tarun Garg, Managing Director and Chief Executive Officer of Hyundai Motor India, described the period as a difficult one. 'Q1 FY27 was a challenging quarter affected by multiple headwinds impacting volumes and profitability,' Garg said, according to the company's stock exchange filing.
He added that recovery is expected to accelerate from the second quarter, citing full normalisation of production, a healthy demand environment, and an upcoming product pipeline. 'With 100 per cent normalisation of production, coupled with healthy demand environment and upcoming product pipeline, recovery is likely to gain pace from Q2 onwards across both domestic and export businesses,' Garg said.
What to Watch Next
The management's guidance points to a Q2 recovery anchored on production normalisation and new model launches. Investors and analysts will be watching whether the uptick in volumes materialises, and whether cost ratios — particularly employee expenses — stabilise. This comes amid a broader auto sector environment where input costs and competitive intensity remain elevated. How Hyundai's domestic volumes and export momentum track through Q2 FY27 will be the key test of management's recovery thesis.
Point of View
Not just a one-quarter blip. A 20 per cent jump in employee expenses alongside a 10.6 per cent rise in other costs — while revenue flatlined — suggests the company's cost base is growing faster than its pricing power can absorb. The EBITDA margin at 9.3 per cent is uncomfortably thin for an automaker of this scale. Management's Q2 recovery narrative rests on production normalisation and new launches, but neither addresses the employee cost trajectory. If the cost structure doesn't reset, headline volume recovery may not translate into meaningful earnings improvement.
NationPress
30 Jul 2026
Frequently Asked Questions
What was Hyundai Motor India's net profit in Q1 FY27?
Hyundai Motor India posted a net profit of ₹889 crore in Q1 FY27 (quarter ended 30 June 2025), a 35 per cent decline from ₹1,369 crore in the same quarter last year. The drop was driven by a broad-based rise in operating costs even as revenue remained largely flat.
Why did Hyundai Motor India's profit fall in Q1 FY27?
The decline was driven by higher costs across multiple categories — employee benefit expenses rose 20 per cent, other expenses climbed 10.6 per cent, and depreciation increased 5.5 per cent. Revenue from operations was nearly unchanged, leaving the expanded cost base to directly erode profitability.
What happened to Hyundai Motor India's EBITDA margin in Q1 FY27?
EBITDA margin contracted sharply to 9.3 per cent from 13.3 per cent in Q1 FY26 — a compression of 400 basis points. EBITDA in absolute terms fell 31 per cent year-on-year to ₹1,511 crore from ₹2,186 crore.
What is Hyundai Motor India's outlook for Q2 FY27?
CEO Tarun Garg said recovery is expected to gain pace from Q2 FY27 onwards, citing 100 per cent normalisation of production, a healthy demand environment, and an upcoming product pipeline. The guidance covers both domestic and export businesses.
How did Hyundai Motor India's revenue perform in Q1 FY27?
Revenue from operations was nearly flat at ₹16,335 crore compared to ₹16,413 crore in Q1 FY26 — a decline of less than 0.5 per cent. The stable topline meant the profit decline was entirely driven by cost inflation rather than a revenue shortfall.
