Discounts Likely To Dent Hyundai India’s Q4 Profit Amid Slowing Sales

Hyundai’s standing as India’s No.2 carmaker was rarely challenged in the nearly three decades since it entered the market with the Santro. After all, the South Korean carmaker has created one category after another in India’s fast-growing car industry—think the i20 (premium hatchback), the Creta (compact SUV) and, of course, the Santro (tallboy).

But, things change.

Sales of the Creta maker fell 0.66% year-on-year to 5,59,149 units in 2024-25—the year it launched India’s largest initial public offering to list on the stock exchanges. Its guaranteed No.2 status has come under threat from historically smaller peers Tata Motors Ltd. and Mahindra & Mahindra Ltd.

Against that backdrop, analysts will look for cues in Hyundai India’s fourth-quarter results for outlook on demand in fiscal 2026 amid rising competition and slowing sales.

The tidings aren’t looking good, though.

Net profit of Hyundai India likely fell by at least a fifth from the year-ago period to Rs 1,332 crore in the three months ended March 31, 2025, even as revenue remained stagnant at Rs 17,350 crore, according to analysts polled by Bloomberg. Operational profit—measured as earnings before interest, tax, depreciation and amortisation—decreased 16.65% to Rs 2,101.7 crore, at a margin that shrunk 160 basis points to 12.7%.

One basis point is one-hundredth of a percentage point.

“Revenue is likely to decline by 1% YoY due to a fall in sales volumes and higher discounts, which will be partially offset by increase in average selling price,” Rishi Vora of Kotak Institutional Equities said in a note.

At 1,91,650 units, Hyundai India sold 1% fewer vehicles in Q4 FY25.

Nirmal Bang’s Varun Baxi weighed in on margins. 

“We build in a margin decline of 204 bps, largely due to negative operating leverage, on account of volume decline and higher raw material costs booked during the quarter, along with higher marketing spend relating to the launch of the Creta EV.”

Still, that’s a thing of the past. After all, the wider car industry grew by less than 5% in fiscal 2025, according to VAHAN data.

Analysts believe fiscal 2026 brings with it good tidings—income tax cuts, implementation of the Eighth Pay Commission and a festive season that once is packed in one month.

Here’s a look at what brokerages expect from Hyundai India’s fourth-quarter results.

Nomura: We estimate ~1% year-on-year decline in revenue led by overall volume decline of 1%. Ebitda margin is likely to increase 170 bps sequentially to ~13%, led by price hikes and lower discounts.

Morgan Stanley: There are two positives: A better SUV mix and sequential volume growth driving leverage gains. There is one negative: Creta EV deliveries started in Q4 FY25. That could result in margin dilution.

JPMorgan: Hyundai should witness a sequential improvement in margins, but year-on-year trends should be weak due to lower volumes.

Nirmal Bang: We build in a margin decline of 204 bps, largely due to negative operating leverage, on account of volume decline and higher raw material costs booked during the quarter, along with higher marketing spend relating to the launch of the Creta EV.

Of the 21 analysts tracking the Hyundai India stock, 18 have a ‘buy’ rating, one ‘hold’ and two ‘sell’. The stock ended 2.01% higher at Rs 1,836.25 a day ahead of earnings, even as the benchmark Sensex rose 1.48% to 82,530.74 points.