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

Shares of Hyundai Motor India Ltd. will be in focus on Thursday, October 29, after brokerages maintained positive views on the automaker following its Q2 FY27 results, which were largely in line with expectations.

Nomura has a ‘Buy’ rating on the stock with a price target of ₹2,442, while CLSA has an ‘Outperform’ rating and a target price of ₹2,300.

Nomura believes Hyundai Motor India is entering a new product cycle that could support double-digit volume growth over the next two years. It said the company’s second-quarter margins were in line with consensus estimates and identified the upcoming mass-market electric vehicle as a key growth catalyst.

The brokerage considers the stock’s valuation attractive at around 17 times its estimated FY29 earnings per share. It expects earnings per share to grow at a compound annual growth rate (CAGR) of 31% over FY27-FY29, with the potential for mid-teens earnings growth beyond FY29.

CLSA said that Hyundai Motor India’s EBITDA margin stood at 9.5% in Q2 FY27, 22 basis points below its estimate, but expanded 29 basis points sequentially. The improvement came despite a 250-basis-point quarter-on-quarter increase in commodity costs, supported by a 0.4% price hike in September 2026, operating leverage, a richer product mix and cost-reduction measures.

Looking ahead to the second half of FY27, CLSA expects a broadly flat commodity basket, according to management. A better export outlook and seasonally higher incentives from Tamil Nadu could also support margins.

The brokerage has factored in 13% compound annual growth in domestic volumes over FY27-FY29. It expects EBITDA margins to gradually normalise from 10.5% in FY27 to 14% by FY29, compared with Hyundai Motor India’s margin guidance of 11% for FY27.

Hyundai Motor India Q2 FY27 results

Hyundai Motor India reported an 18.5% year-on-year increase in standalone revenue to ₹20,696 crore in Q2 FY27, compared with ₹17,461 crore a year earlier. Revenue was marginally below the estimate of ₹20,789 crore.

EBITDA declined 19% year-on-year to ₹1,975 crore from ₹2,429 crore, against an estimate of ₹2,028 crore. The EBITDA margin contracted to 9.5% from 13.9% a year earlier, compared with the estimate of 9.8%.

Net profit fell 24% year-on-year to ₹1,196 crore from ₹1,572 crore, below the estimate of ₹1,263 crore.

Total volumes grew 14.7% year-on-year to 2.19 lakh units. However, brokerage commentary noted that Hyundai Motor India continued to lag some peers in volume growth.

What management said

Hyundai Motor India remains on track to meet its full-year domestic sales growth guidance of 8%-10% and expects to outperform industry growth in the second half of FY27.

The company is targeting high double-digit export growth in the second half, with a longer-term ambition to increase exports to 30% of total production. Management said the conflict in West Asia had disrupted its original export plans, prompting it to explore alternative routes and ports.

The automaker expects to launch its mass-market electric vehicle in Q4 FY27. Dealer feedback also suggests there has been no significant adverse impact from El Niño conditions or the weak monsoon so far.

Management flagged raw material cost volatility as a challenge for margins. If commodity cost pressures persist beyond the US midterm elections, industry-wide price increases may be necessary. Operating leverage, cost controls and price hikes are expected to support a recovery towards the company’s full-year margin guidance.

Hyundai Motor India shares closed 0.30% higher at ₹1,866.90 on Wednesday, October 28. The stock has declined around 19% so far in 2026 and remains below its 52-week high and IPO price.