Hyundai Motor Gets A 'Buy' Rating From Motilal Oswal As It Initiates Coverage; Sees 20% Upside

Motilal Oswal Report

While FY25 is likely to be a moderate year for passenger vehicles in India and consequently for Hyundai Motor India Ltd., we project the company to report an 8% volume CAGR over the next two years. Following a moderation in FY25E earnings, we expect Hyundai Motor India to post 17% earnings CAGR over FY25-27E.

When comparing Hyundai Motor India with Maruti Suzuki India Ltd., which is its closest peer, we believe that while both original equipment manufacturers are very close in competency and future growth potential, we can ascribe a slight premium to Hyundai Motor India over Maruti Suzuki, given:

1. Hyundai Motor India’s technological prowess in emerging technologies that can be customized to meet Indian customer requirements as needed;

2. superior financial metrics;

3. a relatively premium brand perception; and

4. better alignment with industry trends.

We hence assign a 27x one-year Fwd PER multiple to Hyundai Motor India, relative to our target multiple of 26x currently assigned to Maruti Suzuki. Therefore, we arrive at our target price of Rs 2,345 for Hyundai Motor India, based on 27x Sep’26E earnings. We initiate coverage on Hyundai Motor India with a Buy rating.

Key downside risks:

1. lack of revival in domestic PV demand;

2. supply chain issues and logistic disruptions;

3. unfavorable regulatory changes;

4. a delay in the ramp-up of new facilities; and

5. rise in commodity prices.

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