Hyundai Motor India Gets 'Reduce' As HDFC Securities Initiates Coverage — Here's Why

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HDFC Securities Institutional Equities

We initiate coverage on Hyundai Motor India with a Reduce rating, valuing it at 25x Sep-27 EPS for a target price of Rs 2,236.

Hyundai Motor India has stood out in the Indian market over the years, being perceived as a more premium brand vs most key competition. However, competition has caught up in terms of presence in the SUV space and advanced tech and features, leading to the company losing market share from 17.4% in FY16 to 13.9% in FY25.

A key reason for this has been the lack of aggression shown by Hyundai Motor and parent Hyundai Motor Corporation in the Indian market, focusing instead on other core markets. However, we are seeing green shoots of aggression with management announcing 26 model launches (including refreshes and facelifts) by FY30.

Going forward, the passenger vehicle market in India, being underpenetrated vs key developed and developing markets, would benefit from the GST rate rationalization, leading to higher sustained demand in the medium term.

Additionally, Hyundai Motor’s presence in the entry-level SUV segment with Exter, a gap that is there in most competitor portfolios, should benefit from customers uptrading from hatchbacks to SUVs.

Though we are cautious for now, we will closely watch out for any change in business strategy of the management that could help revive the company’s standing in India.

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