Weak demand and high discounts dented the car manufacturer’s second-quarter performance, brokerage Motilal Oswal said, adding that “while the PV industry’s demand remains moderate, we expect HMI to post steady growth given its favorable SUV mix and strong export opportunities going forward.”
Motilal Oswal reiterated a “Buy” rating on Hyundai India and raised the target price by 24% to Rs 2,235.
Brokerage Nomura said the car manufacturer’s EBITDA margin was largely in line with their estimates, adding that the discounts were contained in a tough environment. The brokerage reiterates a “Buy” rating with a target price of Rs 2,472.
“While FY25 is likely to be a moderate year for PVs in India and consequently for HMI, we project the company to report an 8% volume CAGR over the next two years. Following a moderation in FY25E earnings, we expect HMI to post a 14% earnings CAGR over FY25-27E,” said Motilal Oswal.
Also read | Hyundai India Q2 Results: Cons PAT falls 16% YoY to Rs 1,375 crore, revenue down 7%Brokerage Emkay Global trimmed Hyundai India’s EPS guidance for FY25, FY26, and FY27 by about 2.5% each, to factor in the weak demand scenario. The brokerage retains a “Reduce” rating on the company with an unchanged target price of Rs 1,750.“We prefer MSIL over HMIL, given its catch-up on operational and financial metrics (even with a lower SUV mix), a much more diversified product and powertrain mix, and a higher growth optionality (potential small-car recovery, aggressive 8% capacity CAGR, 7-seater SUV launch in H2FY26E, and 10 new models by 2030),” said Emkay Global.
Hyundai Motor India had guided for low single-digit growth for the PV industry in FY25, on the high base of last year. Overall, the performance was weak in the second quarter of FY25 as volume decline was due to the domestic slowdown and geopolitical challenges, which impacted exports, the company had said in its filing on Tuesday.
The car manufacturer said that the decline in PAT was due to weak market sentiments and geopolitical factors. The company’s revenue from operations fell 7% YoY to Rs 17,260 crore during the quarter.
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