The brokerage now has a “buy” rating on the stock and a price target of ₹2,400 per share. The revised price target indicates an upside potential of 22.5% from the stock’s closing price on Tuesday.
A combination of a new SUV cycle, mix skewed towards exports and improving margins have set the stage for the stock to see its Earnings Per Share (EPS) grow at a Compounded Annual Growth Rate (CAGR) of 29% over financial year 2028-2029, after three straight years of decline, according to Bank of America’s note.
Bank of America went on to add that the new launches made by Hyundai Motor India are underappreciated by the street. The brokerage believes that the mid-SUV and the compact E-SUV can add more than 11.5 percentage points to the company’s market share, with potentially more from MPV and hybrids after financial year 2027.
Hyundai Motor India’s margins could see a trough in the second half of this financial year on the back of operating leverage, metal easing and product mix, Bank of America said, adding that at 23 times its financial year 2028 estimated price-to-earnings, the stock valuations are reasonable, as earnings begin a rebound.
Hyundai Motor had reported a mixed set of earnings in the March quarter. Its net profit declined 22.2% to ₹1,255.6 crore from the previous year, but was above Street estimates of ₹1,204 crore.
Its revenue from operations was up 8% at ₹18,916 crore from the previous year, but below Street expectations of ₹19,270 crore.
Its EBITDA declined 22.4% to ₹1,966 crore and EBITDA margin contracted to 10.4% from 14.2% in the year-ago period. The same was broadly in-line with analyst estimates of 10.6%.
Of the 31 analysts who have coverage on the stock, 25 have a “buy” rating and three each have “hold” and “sell” ratings.
Shares of Hyundai Motor India are trading 3.6% higher on Wednesday at ₹2,031. The stock is now trading above its IPO price of ₹1,960 per share.
Also Read: Adani Ports shares get their highest price target from HSBC who projects a 21% upside
