Hyundai India shares surge 9% as brokerages back growth outlook
Hyundai Motor India shares surged 9% despite a sharp drop in quarterly profit, as investors priced in management's bullish volume guidance and a robust pipeline of upcoming SUV and electric vehicle launches.
Hyundai Motor India shares jumped more than 9% on Friday to an intraday high of ₹2,208.90, leading the Nifty 100 higher. The rally came even after the automaker reported a 35% decline in first-quarter profit, as investors focused on an upbeat outlook for the second half of the financial year.
Consolidated profit after tax fell to ₹888.62 crore for the quarter ended June 30, down from ₹1,369.23 crore a year earlier. Revenue edged down marginally to ₹16,334.63 crore, while total expenses climbed to ₹15,407.35 crore. The company posted an EBITDA margin of 9.3%, constrained by commodity inflation and lower volumes.
Tarun Garg, Managing Director and CEO, attributed the first-quarter weakness to multiple headwinds but projected a recovery starting in the second quarter. "I expect business momentum to improve from the second quarter, supported by the full normalisation of production, healthy demand conditions, and a robust product pipeline," Garg said. The company reiterated its full-year guidance for 8-10% volume growth and an EBITDA margin of 11-14%.
The forward-looking guidance was enough to maintain broad analyst support. Nuvama Institutional Equities raised its target price to ₹2,500, citing expectations for seven new model launches by FY30, including a compact electric SUV in the second half of FY27. Nomura and CLSA also kept their 'Buy' and 'Outperform' ratings, with targets of ₹2,498 and ₹2,300 respectively, noting that price hikes and cost controls are helping to mitigate raw material pressures.
Motilal Oswal Financial Services retained a 'Buy' rating with a ₹2,334 target, highlighting that first-quarter profit still exceeded estimates due to higher other income and lower depreciation. The brokerage forecasts a 9% volume compound annual growth rate and a 16% earnings CAGR over FY26-FY28. Nuvama projects a 15% revenue CAGR and 14% EBITDA CAGR over the same period.
The stock's technical profile also improved following the earnings release. Sudeep Shah, Head of Technical Research at SBI Securities, noted the shares broke out of a six-week consolidation range between ₹1,882 and ₹2,065. He indicated that momentum indicators have turned bullish, with immediate support established at the ₹2,060-2,065 zone.
