Hyundai Motor India (HMI), the country’s second-largest automaker, expanded its profits by 21.5% to Rs 2,582 crore in the previous fiscal. The profit growth is much better than that of market leader Maruti Suzuki, which reported a 3% decline to Rs 7,500 crore for the year ended March 31, 2019.
A product mix which includes high-segment cars like Creta and next gen Verna ensured a healthy profit growth in FY19. Hyundai also relaunched hatchback Santro in October 2018.
HMI’s operating revenue grew 6.5% y-o-y in FY19, according to the data filed with the Ministry of Corporate Affairs.
Maruti’s operating revenues rose 5% y-o-y on the back of a 5.3% y-o-y increase in domestic sales units.
The profits at the wholly owned subsidiary of Korean carmaker Hyundai Motor Company had grown 7.7% y-o-y to Rs 2,124 crore in 2017-18.
In a market that grew 2.7% y-o-y, HMI’s domestic sales rose just 1.7% in FY19 to 5.45 lakh units while exports increased 5.3% y-o-y to 1.62 lakh units, driven by the demand in the West Asia and African countries.
HMI, which witnessed a 20-bps decline in domestic market share to 16.1% in FY19, paid `1,114 crore as royalty to the parent firm — an increase of 13.2% y-o-y.
According to the Society of Indian Automobile Manufacturers (Siam), the domestic passenger vehicle market grew 2.7% y-o-y to 33.7 lakh units. It was the lowest growth in the last five years.
“Liquidity crunch, followed by the NBFC, crisis led to moderation in credit availability, thereby negatively impacting domestic demand and growth in the second half of the financial year 2018-19,” the company noted in its filing.
In the first half of FY20, domestic PV sales have declined 23.5% y-o-y due to weak consumer sentiment, selective financing by NBFCs, increase in vehicle prices on account of BS-VI norms.
“FY2020 could be a challenging year for the sector due to transition to BS-VI norms from April 1, 2020,” Kotak Institutional Equities analysts had noted.