Hyundai Motor Shares To Reach Rs 2,970? Goldman Sachs Says 'Buy', Expects Demand Elasticity To Boost Sales

Goldman Sachs has raised its target price for Hyundai Motor India Ltd from Rs 2,600 to Rs 2,970 while maintaining a 'buy' rating on the stock, which got listed on bourses in October 2024.

The brokerage firm expects Hyundai to benefit from 'demand elasticity', which could take place following the pass-through of lower GST to consumers. This could particularly aid the company's various offerings, including compact SUV models, premium hatchbacks, and sub-4-metre sedans. These segments are likely to benefit more than sports utility vehicles or entry-level cars.

Hyundai Motor is the second-largest carmaker in India, which derives 78% of its revenue from the domestic market, thus making the local demand scenario and consumption trend critical.

In line with the expected uptick in sales volume, Goldman Sachs has increased its FY27-FY28 earnings per share (EPS) estimates by up to 8%.

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Earlier in the month, Hyundai Motor India, in a conversation with NDTV Profit, forecasted robust sales due to the ongoing festive season.

The company also expects the urban market to join the party on account of the GST boost and income tax relief.

"The rural market went up from 19% to 23% in terms of contribution to total sales. "Now with GST cuts, urban markets are set to join the party," said Tarun Garg, Chief Operating Officer at Hyundai Motor India.

Hyundai Motor India currently trades with a relative strength index of 63.98, which suggests the stock is currently in a strong upward price momentum.

A total of 20 out of 26 analysts tracking the company have a 'buy' rating on the stock; three recommend a 'hold', while three recommend 'sell', according to Bloomberg data. The 12-month analysts' consensus target price implies a downside of 7.4%.