Hyundai Motor India: Nomura sees new model cycle driving growth, CLSA expects margin recovery

Shares of Hyundai Motor India Ltd. were trading over 5% greater on Thursday, October 29, after brokerages preserved favorable views on the car manufacturer following its Q2 FY27 results, which were mostly in line with expectations.

Nomura has a ‘Buy’ ranking on the stock with a cost target of 2,442, while CLSA has an ‘Outperform’ score and a target rate of 2,300.Nomura thinks Hyundai Motor India is getting in a brand-new item cycle that might support double-digit volume development over the next 2 years. It stated the business’s second-quarter margins remained in line with agreement price quotes and recognized the upcoming mass-market electrical car as an essential development driver.The brokerage thinks about the stock’s evaluation appealing at around 17 times its approximated FY29 incomes per share. It anticipates revenues per share to grow at a compound yearly development rate (CAGR) of 31% over FY27-FY29, with the capacity for mid-teens profits development beyond FY29.CLSA stated that Hyundai Motor India’s EBITDA margin stood at 9.5% in Q2 FY27, 22 basis points listed below its price quote, however broadened 29 basis points sequentially. The enhancement came regardless of a 250-basis-point quarter-on-quarter boost in product expenses, supported by a 0.4% cost walking in September 2026, running utilize, a richer item mix and cost-reduction procedures.Expecting the 2nd half of FY27, CLSA anticipates a broadly flat product basket, according to management. A much better export outlook and seasonally greater rewards from Tamil Nadu might likewise support margins.The brokerage has factored in 13% substance yearly development in domestic volumes over FY27-FY29. It anticipates EBITDA margins to slowly normalise from 10.5% in FY27 to 14% by FY29, compared to Hyundai Motor India’s margin assistance of 11% for FY27.Hyundai Motor India Q2 FY27 resultsHyundai Motor India reported an 18.5% year-on-year boost in standalone income to 20,696 crore in Q2 FY27, compared to 17,461 crore a year previously. Profits was partially listed below the quote of 20,789 crore.EBITDA decreased 19% year-on-year to 1,975 crore from 2,429 crore, versus a price quote of 2,028 crore. The EBITDA margin contracted to 9.5% from 13.9% a year previously, compared to the price quote of 9.8%.Net earnings fell 24% year-on-year to 1,196 crore from 1,572 crore, listed below the quote of 1,263 crore.Overall volumes grew 14.7% year-on-year to 2.19 lakh systems. Brokerage commentary kept in mind that Hyundai Motor India continued to lag some peers in volume development.What management statedHyundai Motor India stays on track to satisfy its full-year domestic sales development assistance of 8%-10% and anticipates to outshine market development in the 2nd half of FY27.The business is targeting high double-digit export development in the 2nd half, with a longer-term aspiration to increase exports to 30% of overall production. Management stated the dispute in West Asia had actually interrupted its initial export strategies, triggering it to check out alternative paths and ports.The car manufacturer anticipates to introduce its mass-market electrical lorry in Q4 FY27. Dealership feedback likewise recommends there has actually been no considerable negative effect from El Niño conditions or the weak monsoon up until now.Management flagged basic material expense volatility as a difficulty for margins. If product expense pressures continue beyond the United States midterm elections, industry-wide cost boosts might be essential. Running take advantage of, expense controls and cost walkings are anticipated to support a healing towards the business’s full-year margin assistance.Hyundai Motor India shares closed 0.30% greater at 1,866.90 on Wednesday, October 28. The stock has actually decreased around 19% up until now in 2026 and stays listed below its 52-week high and IPO cost.