Hyundai Motor shares jump 9%; brokerages see new launches driving growth, raise target prices

Shares of Hyundai Motor India Ltd (HMIL) surged 9.11 per cent in Friday's trade to hit a high of Rs 2,208.90 after the company reported its June quarter earnings, with select brokerages highlighting its upcoming product pipeline as a key growth catalyst.

Motilal Oswal Financial Services Ltd (MOFSL) said the automaker's June quarter profit exceeded its expectations. "HMIL Q1 FY27 PAT at Rs 890 crore beat our estimate of Rs 830 crore, largely due to higher-than-expected other income and lower depreciation. EBITDA margin came in line at 9.3 per cent, down 400bp YoY. This was due to the impact of commodity inflation, lower volumes, plant startup costs, and an adverse product mix," the brokerage stated.

MOFSL expects the company's upcoming vehicle launches to support growth in the second half of the current financial year.

"The new mid-size SUV and mass-market dedicated EV are expected to be key growth drivers in H2. The mid-size SUV will adopt a differentiated, technology-first positioning, while the EV is being developed with high localisation and targeted PLI eligibility," it added.

"Considering its launch pipeline and a strong export order book, we expect HMIL to post a ~9% volume CAGR over FY26-28. This growth is likely to be boosted by a 12% volume CAGR in exports. Overall, HMIL is projected to deliver a ~16% earnings CAGR over FY26-28. We believe the company remains well-positioned to benefit from the premiumization trend in India, given its mix is in favor of SUVs. The stock at 29.7x / 22.6x FY27E / FY28E EPS appears attractively valued," MOFSL also said.

The brokerage kept its 'Buy' rating while increasing its target price. "Reiterate BUY with a TP of Rs 2,334, valued at 26x FY28E EPS," MOFSL said.

Nuvama Institutional Equities also retained its positive view on the stock, citing Hyundai's planned product launches and capacity expansion.

The brokerage noted that the company has outlined plans for seven new nameplate launches by FY30E, with two key launches -- an internal combustion engine (ICE) mid-size SUV and a compact electric SUV -- scheduled for H2 FY27.

"New products supported by capacity expansion shall drive revenue/EBITDA CAGR of 15 per cent/14 per cent over FY26–28E with a mean RoIC of ~38 per cent. We retain 'BUY' with a TP of Rs 2,500/share (earlier Rs 2,400), based on 30x FY28E core EPS plus cash of ~Rs 100/share. At CMP, the stock trades at FY27E/28E PE of 30x/22x," Nuvama stated.