LKP Research, Hyundai Motor India Ltd
Hyundai Motor India (“HMI”) was incorporated on May6, 1996 and is promoted by Hyundai Motor Company (“HMC”). HMI is the 3rd largest auto original equipment manufacturer (“OEM”) in the world based on passenger vehicle sales in CY2023. They have been the 2nd largest auto OEM in the Indian passenger vehicles market since FY2009 (in terms of domestic sales volumes). HMI has a track record of manufacturing and selling 4-wheeler passenger vehicles that are reliable, feature-rich, innovative and backed by the latest technology. They have a portfolio of 13 models across multiple passenger vehicle segments by body type such as sedans, hatchbacks, sports-utility vehicles (“SUVs”) and battery electric vehicles (“EVs”). HMI also manufacture parts, such as transmissions and engines. They have also been India’s 2nd largest exporter of passenger vehicles from April 1, 2021 through June 30, 2024. Since inception, they have cumulatively sold 12 mn vehicles in India and through exports.
Valuation and Outlook
At the upper end of the price band, on FY 24 earnings, the stock should trade at 26x times which is a fair value as compared to its closest peer Maruti Suzuki (29x FY 24 earnings). Therefore, on all favourable parameters, we assign a SUBSCRIBE rating on the stock. We recommend to be invested in this stock over long term for higher returns.
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