Hyundai Motors down by more than 10% since listing; Should you buy?
Hyundai Motors down by more than 10% since listing; Should you buy?
The automobile space is heating up with competition, many players are entering this space to grab market share and leverage the opportunities that the market offers. Many Passenger Automakers are venturing into electric vehicles and the faster the adoption the better. Many automakers find it hard to survive in the market and the brand value matters in the long run to sustain. One among them is Hyundai Motor India.
Their expertise in auto manufacturing and the brand value they possess keep investors focused on the company to bring out innovative products and be competitive. In this article, there are some plans, financials, and brokerage targets who are optimistic about the company’s growth.
Stock Movement
In Tuesday’s trading session, Hyundai India’s share price traded and fell by 1.84 percent and touched a day’s high of Rs. 1,807.95 apiece. The stock price closed at Rs. 1,770.15 per share and the previous close of Rs.1,803.35 per share. From the IPO price, the stock has discounted 10.72 percent from the listing day.
Financial Performance
The company has reported its revenue from operations of Rs. 69,829 crores in FY24 which is an improvement of 15.78 percent from Rs. 60,308 crore in FY23. Net Profits stood at Rs. 4,709 crore in FY23 and saw an increase of 28.68 percent to Rs. 6,060 crore in FY24.
Regarding return ratios, the return on capital employed (ROCE) currently stands at around 62.90 percent, whereas the return on equity (ROE) is at 56.82 percent. The stock is trading at a P/E (Price to Earnings) ratio of around 23.7. The company also has a current ratio of 1.44 and debt to equity ratio of 0.07 times.
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Future Plans
Hyundai Motor India plans to invest Rs. 32,000 crore by 2032, focusing on its Chennai and Pune plants. The company aims to launch four electric vehicles in early 2025, while also introducing hybrid models. Additionally, HMIL will improve its local battery assembly and charging infrastructure to support its EV strategy.
Brokerage Targets
Recently after listing, the stock discounted from the IPO price band is trading around Rs. 1,759.25 per share. Motilal Oswal gave a buy rating on the stock for Rs. 2,345 per share with a potential upside of 33 percent citing strong brand presence in India and their technological adaption and capabilities to invest in futuristic technologies. Nomura gave a buy target of Rs. 2,472 per share with a potential upside of 40 percent. Some analysts have an optimistic approach to the company’s long-term growth, their plans for expansion, and their focus on the EV segment.
Company Overview
Hyundai Motor India Limited (HMIL) is a wholly-owned subsidiary of the parent Hyundai Motor Company. HMIL was incorporated in 1996. Over the years, the company has grown rapidly to become India’s second-largest car manufacturer and the leading exporter of passenger vehicles. The company operates through two manufacturing plants in Tamil Nadu, with a combined annual capacity of around 7,40,000 units.
HMIL offers a diverse range of vehicles which includes popular models like the Creta and IONIQ 5. With a robust network of 1,366 sales points and 1,550 service centers, HMIL constantly innovates and has sustainability in its operations which aligns with Hyundai’s global vision.
Written by Santhosh
Disclaimer
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