(Bloomberg) -- Hyundai Motor India Ltd., the country’s second-largest carmaker, posted a 16% fall in the first quarterly profit after its public listing last month, amid a broader slowdown in consumption demand that has also hurt its local rivals.
Net income was at 13.4 billion rupees ($159 million) for three months ended Sept. 30, according to a filing Tuesday. There weren’t enough brokerage estimates to derive an average profit forecast.
Revenue slipped 8.3% to 168.8 billion rupees compared with the same period last year, while costs dropped 7.9%.
The decline in profit was “mainly due to weak market sentiments and geo-political factors,” the carmaker said in a post-earnings statement, adding that it “expects a sustained demand momentum” in the mid to long term.
The local unit of South Korea-based Hyundai Motor Co., which counts sports utility vehicles and crossover cars among its bestsellers, begun trading on Oct. 22 after raising $3.3 billion in India’s largest initial public offering.
The tepid earnings is the latest show of the broader consumption slump in India that has hurt sales of everything from soaps to instant noodles and paint. Hyundai’s top local rivals, Maruti Suzuki India Ltd. and Tata Motors Ltd. posted quarterly profit that missed analyst estimates.
Hyundai Motor India’s Stock Declines in Debut After Record IPO
Hyundai Motor India sold 149,639 cars in the domestic market during the quarter and exported another 42,300, the statement said.
The trend of low-single digit sales growth across the sector is expected to continue this year, Tarun Garg, chief operating officer of Hyundai Motor India said in a post-earnings media call Tuesday.
Sluggish Conditions
“Despite the sluggish market conditions, we have successfully maintained profitability” in the April to September period due to “continuous cost control measures,” Unsoo Kim, managing director of Hyundai’s India unit said in the statement.
The carmaker plans to roll out the electric version of Creta in the coming months and sees it as “a game changer in the EV market,” Kim said. The December quarter should be stable on the back of SUV sales and higher demand during India’s wedding season, he said in the media call.
Seven brokerages recommend buying the stock while two have a ‘sell’ rating, according to data compiled by Bloomberg.
Shares of Hyundai’s India unit closed 1% lower after the earnings were announced during market hours, pushing the decline since market debut to almost 8%. Benchmark NSE Nifty 50 index fell 3.6% in the same period.
The firm sold 14% of all cars in September, way behind sector leader Maruti’s 41.2% market share, according to data from India’s auto dealers association.
(Updates with COO’s comments in the seventh paragraph.)
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