Shares of Hyundai Motor India Ltd tumbled during the trading session on Thursday. The stock has been on a downward spiral on the back of multiple reasons including the volume concerns, buzz of eased EV imports and muted quarterly earnings and Tesla's entry in India.
Shares of Hyundai Motor India dropped more than 6.65 per cent to Rs 1,700.05 during Thursday's session, commanding a total market capitalization of Rs 1.38 lakh crore. The auto major had settled at Rs 1,821 in the previous trading session on Tuesday. The stock is marching towards its 52-week low at Rs 1,610.15 a month ago.
Listed in October 2024, after launching the biggest IPO in the Indian markets amounting to Rs 27,870 crore, the stock has remained largely flat, topping the issue price barely. The company sold its shares for Rs 1,960 apiece and scaled all time high of Rs 1,968 but is currently down 13.25 per cent from its IPO price.
In multiple exchange filings with the exchanges, the company announced its schedule of analyst/institutional investor meetings with JP Morgan on March 3, March 4, March 5 and March 6. Hyundai Motors India is set to join Nifty Next 50 index in the upcoming rejig in March. However, the announcement for the same was down a week ago.
Being in Indian markets for more than 25 years, Hyundai Motor India is a part of the South-Korea's Hyundai Motor Group, which is the third largest auto original equipment manufacturer (OEM) in the world based on passenger vehicle sales. It manufactures and sells reliable, feature-rich, and innovative four-wheeler passenger vehicles backed by the latest technology. The company also manufactures parts such as transmissions and engines.
Hyundai Motor India reported an 19 per cent YoY decline in its net profit at Rs 1,161 crore for the December 2024 quarter, on the back of lower domestic sales and exports. The Korean car maker's revenue from operations was down 1.3 per cent YoY to Rs 16,648 crore. The decline in margins was mainly due to subdued demand & geo-political factors.
Following its Q3 earnings, InCred Equities shad that Q3 EPS dipped 19 per cent YoY to Rs 14.3, sharply below estimates. The EBITDA margin fell to a two-year low of 11.3 per cent and Creta EV volume plan doesn’t impress., it said.
"We await a new product strategy to utilize Pune plant’s capacity planned in CY25F and Cut FY25F-27F EPS by 2-7 per cent. We value the stock at a 10 per cent discount to leader Maruti’s 1-year forward P/E due to market share underperformance. Cut TP to Rs 1,414," it added with a 'reduce' rating on the stock.
Hyundai’s volumes are likely to remain flat in FY25, said Anand Rathi Research. It is seen a 2 per cent contraction in volume in year 2025 so far, while the volumes dropped 5 per cent in January on a month-on-month basis, it said. Even the exports from Hyudai Motors India saw a mild de-growth on a yearly comparison, said Anand Rathi's report.
Hyundai lost market share by 70 bps on a year-to-date basis to 14.8 per cent and Hyundai Creta has clocked its highest-ever sales of 18,522 units in January 2025. "We also like Hyundai as it appears well aligned to benefit from the industry trends toward UVs," it said. Despite all this, Hyundai remains top picks of Motilal Oswal from the auto sector.
Motilal has a 'buy' rating on Hyundai Motors with a target price of Rs 2,235. Among other brokerage firms, JM Financial has a 'buy' rating on Hyundai Motor India with a target price of Rs 1,900, while Kotak Institutional Equities has an 'add' rating on the stock with a target price of Rs 2,000.