Hyundai Motor Q4 Review: Premiumisation Lifts Margins But Growth And Market Share Worries Linger

Hyundai Motor India Ltd. posted a stronger-than-expected fourth quarter performance, driven by improved average selling prices, favourable product mix, and lower discounting. Despite this margin-led beat, brokerages remain cautious about the company's medium-term growth prospects, flagging persistent concerns over market share, muted domestic outlook, and expensive valuations.

Jefferies downgraded Hyundai to underperform and cut its target price to Rs 1,625 from Rs 1,850, citing a fall in India private vehicle market share to a 20-year low and a subdued growth outlook. The brokerage expects Hyundai to grow merely in line with the industry domestically, and 7–8% year-on-year in exports for fiscal 2026.

Jefferies also cut FY26-27E EPS by 3–5%, stating Hyundai's 25 times FY26E P/E is steep for a company expected to deliver just 10% EPS CAGR over FY25–28.

BofA maintained an 'underperform' rating but raised its target to Rs 1,850, noting strong margin performance supported by favourable model mix, lower discounting, price hikes, and state incentives. However, it underlined that volume growth remains tepid and market share recovery is still some distance away. The brokerage flagged fiscal 2026 as a transition year, with limited catalysts until a new launch cycle kicks off post commissioning of a new plant in November 2025.

JPMorgan kept an 'overweight' rating with a revised target of Rs 2,060, highlighting a 4.8% quarter-on-quarter increase in ASPs and strong margin delivery. However, it acknowledged that volume pressure may persist in the first half of financial year 2026, particularly due to the delayed benefit from new capacity and weaker domestic demand. It trimmed FY26 EPS estimates by 8% and FY27 by 4%, anticipating margin impact from start-up costs at the new plant and weaker operating leverage.

Macquarie remained most bullish, retaining an 'outperform' with a Rs 2,100 target. It sees Hyundai's premium positioning, new launches, and export strategy as key positives. Hyundai plans to launch 26 models by financial year 2030, with eight expected over fiscal 2026–2027, supported the Rs 7,000 crore capex planned for financial year 2026.

The brokerage highlighted rising demand for feature-rich vehicles, such as those with ADAS and sunroofs, as a key driver of Hyundai's ongoing premiumisation strategy.

Across brokerages, Hyundai's improved ASPs and feature-rich product mix were unanimously recognised as the primary drivers of fourth quarter margin outperformance. The company benefitted from a 0.6% price hike in January, lower discounts, and a higher share of premium models in both domestic and export markets.