Hyundai Motor India's first earnings report after listing revealed that the company, which is India's second largest carmaker based on market share, saw a 16.5% drop in its quarterly profit, due to lower sales at home and disruptions along the Red Sea, which hurt exports.

Shares of the company fell by nearly 3%, before recovering and trading down about 1% late in the afternoon.

Hyundai, the company that makes the Creta SUV, reported a drop in its profit to 13.38 billion rupees (158.6 millions dollars) for the second quarter ending Sept. 30 from 16.02 billion rupees the year before.

Hyundai, which has a 15% market share, is only behind Maruti Suzuki (41%), who reported a 6% decline in its domestic sales in India, and accompanied by a 17% drop in exports due to disruptions in the Red Sea region.

Since late 2023, Houthi rebels are attacking ships in the Red Sea. This has caused global supply chains to be disrupted as vessels have been diverted around Africa’s Cape of Good Hope.

India's domestic car sales dropped from July to September for the first quarter in 10 years, due to a lack of demand for small cars, and a slowdown in growth for some SUV makers, such as Hyundai and Maruti.

Maruti, a company that primarily sells small vehicles, reported the slowest growth in revenue for the quarter since nearly three years.

Hyundai's total revenue dropped 7.5% in the third quarter to 169.61 trillion rupees as the sales volume, including exports fell about 9%.

Hyundai's SUV sales, which make up about 60% of its total volume, fell 0.5%.

The company expects sustained car demand in the medium to long-term. ($1 = 84.3800 Indian rupees) (Reporting by Nandan Mandayam in Bengaluru; Editing by Savio D'Souza)

(source: Reuters)