Chennai: Hyundai Motor India (HMIL) expects a sharp rebound in sales from the second quarter, banking on a recovery in production, a strong export order book, festive-season launches and accelerated capacity expansion, after a supplier fire and geopolitical disruptions weighed on its first-quarter performance.The company on Thursday reported a 35% decline in its net profit to Rs 889 crore for the June quarter, compared with Rs 1,369 crore in the year-ago quarter. Consolidated revenue from operations stood at Rs 16,335 crore, compared with Rs 16,413 crore a year earlier.Its Q1 FY27 margins were impacted by a combination of factors. The production disruption caused by the fire incident at a supplier unit in Chennai affected volumes, especially of certain high-margin models, while the West Asia conflict impacted export volumes. Further, the company was affected by elevated commodity prices, Tarun Garg, MD & CEO of HMIL, said while discussing the company’s Q1 performance and outlook.However, he reaffirmed the company’s guidance of 8-10% volume growth and an EBITDA margin of 11-14% for FY27, saying most of the production lost due to the June fire at a key supplier’s facility had already been recovered in July, with the balance to be made up during the current quarter. Garg said the temporary disruption is behind the company, and Hyundai is well positioned to return to its growth trajectory, supported by normalised production, healthy demand and an expanding product portfolio.To strengthen its domestic business and drive more volumes, Hyundai will launch a new mid-size SUV during the festive season, followed by a dedicated electric SUV in the Venue segment later this fiscal. Hyundai is also accelerating its manufacturing expansion. It will begin third-shift operations at its Pune plant from October 2026—almost two years ahead of its original timeline. At the Chennai facility, utilisation is expected to improve from around 83% to nearly 90% as production of the upcoming SUV and EV ramps up.Garg said rural markets continue to outperform urban centres, with rural contribution rising to a record 25.9% of domestic sales during the April-June quarter, compared with 22.6% a year earlier. Rural sales grew 23.2%, against just 2.8% growth in urban markets. Six out of every ten new Hyundai outlets are now being opened in rural areas.While exports were hit by the West Asia conflict and the June production disruption, Hyundai said the underlying demand remains robust. The company has a substantial order backlog in the Middle East, which it expects to start translating into higher dispatches from July.Hyundai has earmarked around Rs 7,500 crore as capital expenditure for FY27, with nearly half allocated to new product development and around 30% towards the Pune expansion and Chennai plant upgrades. The company also said it expects to meet both current and proposed CAFE fuel-efficiency norms without altering its product roadmap, supported by a growing mix of CNG vehicles, EVs and future hybrid offerings.
