Hyundai Motor India: Upgrade to Buy: Launches, margins & exports all set to turn

研报英文原文证据摘录

Hyundai Motor India: Upgrade to Buy: Launches, margins & exports all set to turn

Investment Summary

We upgrade Hyundai Motors India (HMIL) to Buy with a PO of Rs2,400 (23% upside

potential). After three years of weak earnings period and market-share loss, we believe

business is set for acceleration as launch cycle begins in next couple of months (likely

from Sep). This will shift the investor debate from ‘launch delays’ to volume recovery,

margin repair and valuation upside as market share narrative changes. The two new

launches can add 8k units per month (net) in F28, we believe, as they bring portfolio

freshness & plugs important price point & powertrain gap in portfolio.

Why turn constructive now?

Product cycle: from promise to delivery

HMIL’s first new nameplates, under new CEO Mr. Tarun Garg and post listing (Oct 24),

are finally nearing launch. The Bayon-based mid-SUV plugs the price gap between Venue

and Creta, while the compact E-SUV marks Hyundai’s first serious India-focused mass-

market EV attempt. We see these as volume products & not niche as seen by markets.

Margin trough near, See 2H recovery

EBITDA margin has fallen from the 13–14% range to 10.4% in Q4 FY26 and could dip to

9% in Q1 FY27, but we believe Q1 marks the trough. Recovery should be driven by

launch-led operating leverage, easing metals, export mix and localization lever over mid-

term. We forecast EBITDA margin improving to ~12.2% by FY28 on full year basis.

Exports: SUV mix upside on new Venue & new models ramp

With capacity now unlocking & new models adding in, HMIL can leverage India more

aggressively as an export hub. Higher SUV mix in exports will also be realization and

margin accretive. Venue ramp up & Middle East normalization will be key for F28.