Motilal Oswal Maintains Buy Recommendation on Hyundai Motor, Targets Price of Rs 2567

Hyundai Motor India (HMIL) Research Report

Key Highlights

• HMIL management expects healthy retail demand for small cars and SUVs, with compact/micro-SUVs outperforming cars.
• Venue orders have reached 83,000 units with a waiting period of 10-14 weeks.
• HMIL has implemented marketing interventions, including a Creta brand campaign and the launch of a low-priced "Era" variant for the i-20.
• The company has entered the commercial mobility segment, driving up Aura volumes.

Outlook and Future Plans

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• HMIL plans to launch 26 models by 2030, marking the beginning of its new launch cycle.
• The company aims to increase its export mix to 30% by 2030, up from the current 25%.
• Margins are expected to remain under pressure in the near term due to start-up costs, but should improve in the long run with an increasing mix of local production and exports.

Earnings and Valuation Projections

• We expect HMIL to post a 12% earnings Compound Annual Growth Rate (CAGR) over FY25-28E.
• Maintain a BUY rating with a target price of INR2,567, valued at 27x December 2027 estimated earnings per share (EPS).