A look at Hyundai Motor India's FY24 numbers reveals that the company has profit margins that are ahead of most of its peers
15 Oct 2024 | 8502 Views | By Ashutosh Shyam
The dual advantage of volume growth, coupled with increased realizations in the export market, has enabled Hyundai Motor India to remain one of the most profitable carmakers in the country.
According to data from the Red Herring prospectus of its Indian subsidiary, the Creta and Venue manufacturer, it achieved ...
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The dual advantage of volume growth, coupled with increased realizations in the export market, has enabled Hyundai Motor India to remain one of the most profitable carmakers in the country.
According to data from the Red Herring prospectus of its Indian subsidiary, the Creta and Venue manufacturer, it achieved an operating (EBITDA) margin of 13.08% in FY24 -- one of the highest among Indian carmakers.
This is higher than most of its listed peers such as Mahindra & Mahindra, and Tata Motors' PV division.
Market leader Maruti Suzuki is the only listed automaker that has a somewhat similar product portfolio as Hyundai Motor India. On a consolidated basis, Maruti Suzuki's operating margins, at 13.24%, are higher than that of Hyundai Motor India, but on a standalone basis, they are lower.
This marks the fourth consecutive year Hyundai Motor India has maintained double-digit EBITDA margins. In FY23 and FY24, the company’s operating margin expanded by 56 and 94 basis points, resulting in a cumulative gain of 150 basis points over the past two years.
Hyundai Motor India’s revenue grew annually by 21.40% between FY22 and FY24, reaching ₹69,829 crore. This was driven by a 12.85% increase in volume, which reached 777,876 units over the same period.
Domestic sales accounted for 80% of the total volume, with 614,721 units sold in FY24 at an average realization of ₹882,146 per unit.
The company sold 163,155 units in overseas markets with an average price of ₹956,244 per vehicle. The superior realizations in the export market pushed Hyundai’s overall average realization to ₹897,688 per vehicle.
Thanks to a richer product mix, Hyundai’s blended realization is about 42% higher than Maruti Suzuki’s.
In the domestic market, 63% of Hyundai’s output in FY24 consisted of sport utility vehicles (SUVs), a 10% increase from the previous year. This growth was mainly driven by the Creta and Venue, which accounted for half of Hyundai’s total domestic volume.
Hyundai’s premium product mix has allowed the company to generate revenue at about half the level of Maruti Suzuki despite selling only one-third of the volume of India’s largest carmaker.
The contribution per vehicle—a metric reflecting the benefits of higher average selling prices and cost efficiency—stood at ₹2.34 lakh per vehicle in FY24, compared to ₹1.89 lakh in FY22.
Hyundai's superior cost control, including lower employee costs and other efficiencies, further boosted its operating profit. As a result, net profit grew by 44% annually, reaching ₹6,060 crore between FY22 and FY24, translating to a profit of ₹77,907 per vehicle.
The company's Return on Equity (RoE)—a measure of how efficiently it uses shareholders' funds—rose to 62.9% in FY24, up from 28.75% the previous year.
This significant increase was driven by a dividend payout of ₹15,435 crore, which lowered the company's net worth and contributed to the massive expansion in RoE. Hyundai Motor now boasts one of the highest RoE and Return on Capital Employed (RoCE) ratios in the Indian passenger car market, which is valued at around ₹4 lakh crore