Reduce Hyundai Motor India; target of Rs 1750: Emkay Global Financial

Emkay Global Financial's research report on Hyundai Motor India

HMIL has established a strong franchise in India; however, lack of major launches (key growth driver historically in PVs) over the next 12-18M, muted ~5% capacity CAGR, higher royalty, and lower treasury income are likely to restrict EPS growth. While MSIL (REDUCE) also faces similar near-term growth challenges, we prefer it over HMIL given its catch-up on operational and financial metrics (even on lower SUV mix) with a much diversified product and powertrain mix and a higher growth optionality (potential small-car recovery, aggressive 8% capacity CAGR, 7-seater SUV launch in H2FY26E, and 10 new models by 2030) driving a superior 6%/10% revenue/EPS CAGR over FY24-27E.

Outlook

We initiate coverage on Hyundai Motor India (HMIL) with REDUCE (TP of Rs1,750, at ~23x core Sep-26E PER, similar to MSIL) amid a lackluster ~5% EPS CAGR over FY24-27E.