Hyundai Motor India share price falls over 5% amid weak Q2 results, extends decline to third session. Should you buy?

Hyundai Motor India share price plunged over 5% on Wednesday, November 13, extending its weakness, after the country’s second-largest automaker reported its Q2 results. Hyundai Motor India shares fell as much as 5.05% to ₹1,713.25 apiece on the BSE.

Hyundai India share price was down for the third day in a row, with the stock losing nearly 7% in three sessions.

Hyundai Motor India reported a 16% decline in its net profit for the second quarter of FY25, hurt by weak domestic demand and the Red Sea crisis that impacted exports.

The net profit for India unit of the South Korean carmaker fell 16% to ₹1,375.47 crore from ₹1,628.46 crore in the same quarter a year ago. Its revenue in Q2FY25 dropped 7.5% to ₹17,260.38 crore from ₹18,659.69 crore, YoY.

Hyundai Motor India saw domestic sales fall 5.7% to 1.49 lakh units, while exports slid 17% YoY to 42,300 units in the September quarter. HMIL's chief operating officer Tarun Garg said that while domestic sales showed modest sequential growth, overall demand softened in response to cyclical trends, compounded by ongoing geopolitical tensions. The passenger vehicle industry is expected to clock a modest low-single-digit growth this fiscal year, he said.

“Hyundai Motor India (HMIL) has guided to a low-single-digit PV industry growth on a high base and a challenging demand scenario. HMIL has established a strong franchise in India; but the lack of major launches (key growth driver historically in PVs) over the next 9-12 months, muted ~5% capacity CAGR, higher royalty, and lower treasury income are likely to restrict EPS CAGR to 4% over FY24-27E,” said Chirag Jain, Senior Research Analyst at Emkay Global Financial Services Ltd.

The brokerage firm trimmed its FY25, FY26 and FY27 EPS estimates by 2.5% each, to factor in the weak demand scenario. It retained a ‘Reduce’ rating for Hyundai India shares with an unchanged target price of ₹1,750 apiece.

Brokerage firm Motilal Oswal Financial Services (MOFSL) believes while FY25 is likely to be a moderate year for Passenger Vehicles (PV) in India and consequently for Hyundai Motor India, it projects the company to report an 8% volume CAGR over the next two years. 

Following a moderation in FY25E earnings, it expects Hyundai Motor India to post 14% earnings CAGR over FY25-27E.

MOFSL has a ‘Buy’ rating on Hyundai Motor India shares with a target price of ₹2,235 per share.

Hyundai Motor India Vs Maruti Suzuki 

When comparing Hyundai Motor India with Maruti Suzuki India, which is its closest peer, MOFSL said, “While both OEMs are very close in competency and future growth potential, we can ascribe a slight premium to Hyundai Motor India over Maruti Suzuki given Hyundai Motor’s technological prowess in emerging technologies that can be customized to meet Indian customer requirements as needed; superior financial metrics; a relatively premium brand perception; and better alignment with industry trends.”

MOFSL assigns a 27x Sep’26E PER multiple to Hyundai Motor India, relative to our target multiple of 26x currently assigned to Maruti Suzuki. 

Chirag Jain of Emkay Global prefers Maruti Suzuki India over Hyundai Motor India, given its catch-up on operational and financial metrics (even on a lower SUV mix) with a much-diversified product and powertrain mix, and higher growth optionality (potential small-car recovery, aggressive 8% capacity CAGR, 7-seater SUV launch in H2FY26E, and 10 new models by 2030).

Hyundai Motor India Stock Price Update

Hyundai Motor India made a stock market debut last month, with the shares of the auto major listing flat at ₹1,934 on NSE, a discount of 1.3% to the issue price of ₹1,960. Hyundai India shares have fallen over 11% from its listing price and are down more than 12.5% from the IPO price.

At 11:00 am, Hyundai Motor India shares were trading 4.62% lower at ₹1,721.05 apiece on the BSE. 

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.