Shares of Hyundai Motor India Ltd. (HMIL) surged by 9.11 percent in Friday's trade, hitting a high of Rs 2,208.90. This significant jump followed the company's announcement of its June quarter earnings, which prompted several brokerages to highlight HMIL's robust product pipeline as a primary catalyst for future growth.
Brokerages See Strong Growth Ahead
Motilal Oswal Financial Services Ltd. (MOFSL) reported that HMIL's June quarter profit significantly exceeded their expectations. The automaker's Q1 FY27 profit after tax (PAT) came in at Rs 890 crore, surpassing MOFSL's estimate of Rs 830 crore. This outperformance was primarily attributed to higher-than-expected other income and reduced depreciation costs. However, the EBITDA margin settled at 9.3 percent, a 400 basis point year-over-year decline, influenced by commodity inflation, lower sales volumes, plant startup expenses, and an unfavorable product mix.
New Launches to Drive Sales
MOFSL anticipates that Hyundai's strategic new vehicle launches will be pivotal in driving growth during the second half of the current financial year. Key among these are a new mid-size SUV, positioned with a technology-first approach, and a dedicated mass-market electric vehicle (EV). The EV is being developed with a strong focus on high localization, aiming for eligibility under the government's Production Linked Incentive (PLI) scheme.
Considering the upcoming launch schedule and a solid export order book, MOFSL projects HMIL to achieve approximately a 9 percent volume Compound Annual Growth Rate (CAGR) between FY26 and FY28. This growth is expected to be further bolstered by a 12 percent volume CAGR in exports, culminating in an estimated 16 percent earnings CAGR over the same period. MOFSL believes Hyundai is well-positioned to capitalize on India's premiumization trend, particularly given its strong SUV portfolio. The brokerage reiterated its 'Buy' rating for the stock, increasing its target price to Rs 2,334, valuing it at 26x FY28E EPS.
Nuvama Also Positive on Hyundai Outlook
Nuvama Institutional Equities also maintained a positive outlook on HMIL shares. Their optimism stems from Hyundai's ambitious product launch roadmap and ongoing capacity expansion initiatives. The brokerage noted that Hyundai plans to introduce seven new nameplate launches by FY30E, with two crucial launches—an internal combustion engine (ICE) mid-size SUV and a compact electric SUV—scheduled for the second half of FY27.
Nuvama forecasts that these new products, combined with expanded manufacturing capabilities, will drive a revenue CAGR of 15 percent and an EBITDA CAGR of 14 percent from FY26 to FY28. The firm projects a mean Return on Invested Capital (RoIC) of around 38 percent. Consequently, Nuvama retained its 'Buy' rating and raised its target price to Rs 2,500 per share (up from Rs 2,400), based on 30x FY28E core EPS plus approximately Rs 100 per share in cash.