Hyundai Motor India's June-quarter earnings reflected the challenges of a difficult passenger vehicle market, but brokerages believe the company's growth story remains intact as fresh model launches, improving exports and healthier profitability are expected to support a recovery over the coming quarters.
While Citi highlighted stronger-than-expected gross margins despite turning more cautious on volumes, Macquarie said Hyundai delivered a good quarter in a tough operating environment. Kotak Securities also expects market share and profitability to improve gradually from the second half of FY27 as new product launches gather pace.
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Brokerages Decode
Macquarie
- Maintained Outperform with a target price of Rs 2,301.
- Said Hyundai delivered a good June quarter despite a challenging operating environment.
- Expects new model launches and improving export momentum to support growth.
- Noted that management has reiterated its positive FY27 outlook.
- Believes the company remains well positioned for growth with its upcoming product pipeline.
Citi
- Maintained Buy and cut the target price to Rs 2,350 from Rs 2,450.
- Said June-quarter results came in above expectations.
- Highlighted healthy gross margins as the key driver of the earnings beat.
- Was positively surprised by sequential gross margin expansion.
- Turned more cautious on volume growth going forward.
Kotak Securities
- Maintained Reduce and raised the target price to Rs 2,000 from Rs 1,925.
- Described the quarter as broadly in line with expectations.
- Expects Hyundai's market share to improve gradually following upcoming launches.
- Believes multiple launches across powertrains from the second half of FY27 should aid market share gains.
- Expects profitability to improve through operating leverage and normalisation in raw material costs.
Hyundai Q1 Results Highlights
Hyundai Motor India reported a 35.1% year-on-year decline in consolidated net profit to Rs 889 crore, although the figure came in ahead of Street estimates of Rs 858 crore. Revenue slipped 0.5% to Rs 16,335 crore, broadly matching expectations.
EBITDA declined 30.8% to Rs 1,512 crore, while EBITDA margin narrowed to 9.3% from 13.3% a year ago. However, margins were marginally ahead of analyst expectations, supported by better operating efficiency.
Operationally, the all-new Venue posted its highest-ever quarterly domestic sales, while CNG vehicles accounted for 18% of overall sales. The Aura and Exter recorded record CNG penetration of 95% and 32%, respectively. Rural penetration also touched an all-time high of 26%.
Domestic volume growth was limited to 5.4% due to temporary production disruptions, while exports remained affected by the geopolitical conflict in West Asia.
Managing Director and CEO Tarun Garg said production has now fully normalised and, supported by a healthy demand environment and an upcoming product pipeline, the company expects recovery in both domestic and export businesses to gather pace from the second quarter onward.
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