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Nuvama initiates 'Buy' on Hyundai India, sets ₹2,600 target on growth push
Analysts at Nuvama said the company is entering a high-growth phase supported by a strong launch pipeline and backing from global parent Hyundai Motor Company (HMC). HMI, India's second-largest passenger vehicle (PV) original equipment manufacturer (OEM), is planning 26 launches by FY30, including 7-8 all-new models.
'Over the next 18 months, we expect a new compact SUV, a micro E-SUV and multiple refreshes, ratcheting up HMI's domestic MS by ~1pp to 15 per cent by FY28E,' Raghunandhan NL, Manav Shah, and Rahul Kumar of Nuvama said, in a note,
26 launches by FY30, market share set to rise
The product roadmap, analysts suggested, includes facelifts for models like Venue, Verna and Exter, along with new entries based on the Bayon platform (to compete with Maruti Fronx) and a micro electric SUV to rival Tata Punch EV.
Nuvama expects this aggressive expansion to lift Hyundai Motor India's domestic volume/revenue CAGR to 6 per cent/9 per cent over FY25–28, aided by SUV mix and premium features like ADAS and sunroofs.
Parent support brings tech, global access
The company gains a major edge from its parent Hyundai Motor Company (HMC), the world's third-largest mass-market PV maker, with over 40 models sold across more than 200 countries. With $2.9 billion in average annual research and development (R&D) spend (2.5 per cent of revenue), the parent firm enables Hyundai India to fast-track innovation and expand exports.
Export volume/revenue CAGR is expected at 9 per cent/11 per cent over FY25–28, with strong demand from Latin America, Africa, and recovery in Asia and the Middle East, analysts noted.
Solid financials back valuation
Nuvama projects Hyundai Motor India to clock revenue/Ebitda CAGR of 9 per cent/12 per cent with a 57 per cent average RoIC over FY25–28. Annual free cash flow is estimated at ₹4,300 crore during FY26–28, pushing net cash from ₹7,800 crore in FY25 to ₹17,200 crore in FY28. The ₹2,600-target is based on a discounted cash flow (DCF) model implying 30x Sep-27E core PE plus ₹117/share in net cash.
Risks to watch
Potential risks, analysts believe, include weaker-than-expected domestic or export growth, poor product performance amid heightened competition, and margin headwinds from discounting or currency and commodity volatility.
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