1 week ago
Shares of Hyundai Motor India Ltd. declined as much as 6% to hit a day's low of ₹1,714 on November 13, after the car manufacturer reported its September quarter results, which were lower on a year-on-year basis on all parameters.
Global brokerage firm Nomura has maintained a 'Buy' recommendation on Hyundai, with a price target of ₹2,472 per share. The price target from Nomura implies a potential downside of nearly 36% from Tuesday's closing levels.
According to Nomura, the Q2 EBITDA margin was largely in line, and discounts were kept in check despite challenging market conditions.
The brokerage expects new capacity to spur growth next year and forecasts a 17% compound annual growth rate (CAGR) in earnings over FY25-27.
Nomura also noted that the stock is attractively priced at 18 times the projected P/E (price-to-earnings) for FY27.
Emkay, in a note, stated that the automaker has built a strong presence in India; however, the lack of major launches (a key growth driver in passenger vehicles) over the next 9-12 months, a modest 5% capacity CAGR, higher royalty costs, and lower treasury income are expected to limit EPS CAGR to 4% over FY24-27E.
The brokerage said it prefers Maruti Suzuki India over Hyundai Motor, citing Maruti’s progress in operational and financial metrics—even with a lower SUV mix—as well as its more diversified product and powertrain lineup and greater growth potential. This includes a possible small-car recovery, an ambitious 8% capacity CAGR, a planned 7-seater SUV launch in H2FY26E, and the introduction of 10 new models by 2030.
The brokerage has reduced its FY25, FY26, and FY27 EPS estimates by 2.5% each to reflect the weak demand outlook. Emkay has maintained its 'Reduce' rating with an unchanged price target of ₹1,750 per share.
Hyundai Motor India has guided to a low-single digit passenger vehicle industry growth on a high base and a challenging demand scenario.
The South Korean automaker's India unit posted a 16% decline in its overall net profit at ₹1,375 crore for the second quarter. Hyundai had reported a net profit of ₹1,628 crore during the same quarter last year.
The company's revenue for the quarter also declined by 8% to ₹17,260 crore as against ₹18,660 crore last year.
Hyundai Motor India's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) fell by 10% to ₹2,205, while margin narrowed by 30 basis points on a year-on-year basis to 12.8% from 13.1% in the year-ago quarter.
Out of the 9 analysts that track Hyundai Motor India, 7 of them have a 'Buy' recommendation, while two of them have a 'Sell' call.
Shares of Hyundai Motor India are currently trading 4.09% lower at ₹1,730.15. The stock is down 13% below its IPO price of ₹1,960 per share.
