Hyundai Motor India Share Price Target at Rs 2,175: ICICI Securities
ICICI Securities has reiterated a “BUY” recommendation on Hyundai Motor India with a revised target price of Rs 2,175, implying an upside potential of nearly 18% from the current market price of Rs 1,850. The brokerage believes Hyundai Motor India is entering a powerful product-led growth cycle despite reporting muted Q4FY26 profitability. Management remains optimistic about achieving 8–10% volume growth in FY27, supported by two major launches — a mid-size internal combustion engine SUV and a compact localized EV. ICICI Securities also expects profitability to recover gradually through price hikes, better capacity utilization, localization initiatives, and cost optimization. The brokerage believes Hyundai’s expanding SUV portfolio, export diversification, and aggressive capex strategy position the company for sustained medium-term earnings growth.
ICICI Securities Maintains Bullish View Despite Weak Quarterly Profitability
Hyundai Motor India Ltd. (HMIL), the Indian arm of South Korea’s Hyundai Motor Group, delivered a mixed operational performance in Q4FY26. While the company posted strong volume growth, margin pressure and commodity inflation weighed heavily on profitability.
The automaker reported quarterly sales volumes of approximately 2.08 lakh units, reflecting a robust 8.7% year-on-year increase. Revenue from operations rose 5.4% YoY to Rs 18,916 crore. However, EBITDA margins contracted sharply to 10.4% compared with 14.1% in the corresponding quarter last year. Net profit declined 22.2% YoY to Rs 1,256 crore.
The decline in profitability was largely attributed to rising commodity costs, adverse product mix changes, and expenses related to future capacity expansion programs.
SUV Dominance Continues to Strengthen Hyundai’s Competitive Position
One of the most important structural themes supporting Hyundai’s long-term growth outlook remains India’s accelerating shift toward SUVs.
ICICI Securities noted that consumer preference is increasingly moving toward premium vehicles offering elevated seating positions, advanced safety systems, connected technology, and modern styling. Hyundai has emerged as one of the biggest beneficiaries of this transformation.
SUVs now contribute nearly 68% of Hyundai’s total sales mix, broadly ahead of the overall industry average. Flagship models such as the Creta and Venue continue to drive strong traction in the domestic market.
The brokerage highlighted that the Indian passenger vehicle market itself remains structurally healthy. FY26 domestic passenger vehicle sales touched a record 46 lakh units, aided by improving affordability after GST reforms and favorable consumer sentiment.
Two New Launches Could Become Major Growth Catalysts in FY27
Hyundai’s next growth phase is expected to be powered by an aggressive product refresh cycle.
The company has confirmed two major launches during FY27:
- A mid-size ICE SUV
- A compact localized electric SUV
Management believes these launches could materially improve market share in high-growth segments while simultaneously strengthening Hyundai’s export positioning. The compact EV, in particular, is expected to enhance the company’s participation in India’s rapidly evolving electric mobility ecosystem.
ICICI Securities believes these launches, coupled with rising CNG adoption and deeper rural penetration, could allow Hyundai to outperform broader industry growth over the next two fiscal years.
Exports Remain a Strategic Pillar Amid Global Uncertainty
Despite geopolitical volatility in certain overseas markets, Hyundai continues to leverage India as a global export manufacturing hub.
The company indicated during its earnings call that it successfully diversified export exposure toward Latin America and Mexico while reducing concentration risks linked to Middle Eastern markets.
Management also reiterated its confidence in achieving 8–10% export growth in FY27, driven by fresh launches and wider international market penetration.
Hyundai’s India operations are increasingly being integrated into the group’s global manufacturing ecosystem, enhancing long-term revenue visibility beyond domestic demand cycles.
Margin Recovery Could Emerge Through Multiple Operational Levers
Although margins compressed during FY26, ICICI Securities believes profitability recovery remains achievable over the medium term.
Management identified several recovery triggers, including:
- Calibrated vehicle price hikes
- Higher plant utilization
- Localization initiatives
- Value engineering programs
- Normalization of one-off costs
The company continues to guide for EBITDA margins in the 11%–14% range over the medium term despite near-term commodity inflation headwinds.
Importantly, Hyundai’s ongoing localization strategy could gradually reduce dependence on imported components, thereby improving operating leverage over time.
Massive Capex Push Signals Long-Term Expansion Ambitions
Hyundai has announced one of its largest investment programs in India as it prepares for future capacity expansion.
The company plans to invest nearly Rs 7,500 crore in FY27, with approximately half earmarked for new product development and nearly 30% allocated toward manufacturing expansion projects.
A significant portion of this capex will support:
- Pune plant expansion
- Chennai facility upgrades
- Future EV manufacturing readiness
- Additional production capacity
Hyundai aims to exceed annual production capacity of 1.1 million units by 2030, positioning itself aggressively for the next decade of Indian automotive demand growth.
Financial Outlook Suggests Healthy Double-Digit Earnings Potential
ICICI Securities expects Hyundai’s earnings trajectory to improve meaningfully from FY27 onward.
The brokerage projects:
| Financial Metric | FY26P | FY27E | FY28E |
|---|---|---|---|
| Total Revenue | Rs 70,763 crore | Rs 80,257 crore | Rs 89,481 crore |
| EBITDA | Rs 8,598 crore | Rs 8,956 crore | Rs 10,917 crore |
| Net Profit | Rs 5,432 crore | Rs 5,582 crore | Rs 6,796 crore |
| EPS | Rs 66.8 | Rs 68.7 | Rs 83.6 |
The brokerage currently values Hyundai Motor India at 26x FY28 estimated earnings, supporting its revised target price of Rs 2,175.
Key Risks Investors Should Monitor
Despite the optimistic long-term outlook, several risks remain relevant for investors.
ICICI Securities highlighted the following major concerns:
- Persistent commodity inflation affecting margins
- Lower-than-expected recovery in profitability
- Weaker passenger vehicle demand growth
- Execution risks related to new product launches
- Geopolitical uncertainty impacting exports
Additionally, intensifying competition in India’s SUV and EV segments could pressure pricing power over the medium term.
Investment View: Hyundai Positioned for Next Phase of Automotive Growth
ICICI Securities believes Hyundai Motor India is transitioning from a consolidation phase into a renewed expansion cycle.
While FY26 reflected temporary profitability stress, the brokerage expects the company’s strong brand equity, SUV leadership, EV expansion plans, export diversification, and capacity investments to create a favorable long-term earnings profile.
With two strategically important launches approaching, improving rural penetration, and gradual margin recovery likely over the next several quarters, Hyundai appears well-positioned to regain operational momentum and potentially deliver healthy shareholder returns over the medium term.
