Hyundai Motor, SAIL, Canara Bank, Aditya Birla Capital, Bandhan Bank, Brigade Enterprises, V-Guard Q2 Review

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HDFC Securities Institutional Equities

Hyundai Motor India - New plant to keep margins under check in the near term

Hyundai Motor India Ltd.’s Ebitda margin of 13.9% beat estimates, driven by a 54 bps QoQ improvement in gross margins, supported by improving localization and value engineering efforts.

Management has highlighted higher near-term costs related to labor and manufacturing overheads until the new plant ramps up production. We believe this could partially reverse the recent Ebitda margin improvement over the next two–three quarters.

While we remain positive on the passenger vehicle industry over the medium term, led by GST rate rationalization, we are concerned about the company’s lack of aggression in the Indian market in terms of volumes and market share.

We value the company at 25x Sep-27 EPS, with a target price of Rs 2,247, and maintain a Reduce rating.

Canara Bank - Strong Q2; quality of deposit franchise key monitorable

Canara Bank’s Q2 FY26 earnings beat estimates on the back of healthy growth on both sides of the balance sheet coupled with continued traction in other income, stable margins, and in-line asset quality.

Loan growth (~15% YoY; +5% QoQ) was strong, largely driven by retail and overseas segments. Deposit growth (+13% YoY, +4% QoQ) was healthy, with CASA ratio improving to 28% (+106 bps QoQ).

While Canara Bank witnessed a pick-up in core earnings, we flag the bank’s structural challenges around a weak deposit franchise, high dependence on non-core earnings (recovery from written-off accounts, PSLC commission), and higher non-performing asset concentration.

We raise FY26E/FY27E estimates by ~12%/~6%, factoring in higher other income from stake sale in subsidiaries (to be booked during Q3 FY26).

We introduce a sum-of-the-parts valuation with listed subsidiaries adding ~Rs 10 (Can Fin Homes valued at 1.7x Sep-25 adjusted book value per share, Canara Robeco AMC and Canara HSBC Life are valued at CMP).

We maintain Add, with a revised SOTP-based target price of Rs 140 (0.9x Sep-27 ABVPS).

SAIL - Strong volume offtake

We maintain Add on Steel Authority of India Ltd., with a revised target price of Rs 135/share (5.5x Sep’27E standalone Ebitda). In Q2 FY26, SAIL’s total/own sales volume firmed up 20/12% YoY.

Weak pricing across longs/flats pulled down adjusted margin by Rs 0.5k/MT QoQ to Rs 5.1k/MT.

On a YoY basis, adjusted margin improved by ~Rs 1.4k/MT, given strong op-lev gains.

We expect SAIL’s volume to grow by 11% YoY in FY26E, supported by NMDC Steel’s traded sales. SAIL also expects steel prices to recover Nov onwards.

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