Hyundai Motor India Share Price Target at Rs 2,050: Kotak Securities
Kotak Institutional Equities has issued a BUY recommendation for Hyundai Motor India, setting a 12-month fair value of Rs2,050 per share. The report underscores Hyundai’s robust manufacturing capabilities, highlighted by a new plant in Talegaon and an innovation center in Hyderabad. It notes operational fungibility, automation, and digital integration as key strengths, while cautioning about near-term muted demand due to weak consumer sentiment. The research expects industry momentum to improve from the second half of FY26, driven by new product launches and entry into the MUV segment. The stock’s current market price is Rs1,861, with a potential upside of approximately 10% to the target.
Kotak Institutional Equities: BUY Call on Hyundai Motor India
Kotak Institutional Equities has initiated coverage on Hyundai Motor India (HMI) with a BUY recommendation, projecting a robust upside to a target of Rs2,050 per share.
The research house maintains a cautious outlook on the broader automobile sector but singles out HMI for its operational excellence and strategic initiatives. The report is anchored on a recent factory visit, which revealed significant advancements in manufacturing processes, automation, and digital transformation. Hyundai’s two integrated plants in India span 540 acres, with a third dedicated to green spaces, reflecting the company’s commitment to sustainability and efficiency. The assembly lines are now fungible, allowing simultaneous production of internal combustion engine (ICE) and electric vehicles (EVs), a notable competitive advantage in the evolving automotive landscape.
Manufacturing Prowess and Operational Flexibility
Hyundai’s manufacturing operations are a study in efficiency and adaptability.
The company has dramatically reduced vehicle assembly time—from four minutes per vehicle in 1998 to just 31 seconds in 2025—thanks to advanced automation and digital monitoring. The facilities employ 234 robots and feature fully automated welding processes, supporting a maximum annual capacity of 415,000 units. Key innovations include electro-monorail systems, cold test beds, and digital monitoring, all of which contribute to streamlined operations and reduced environmental impact. The flexible assembly lines enable rapid adaptation to market demands, a critical factor as the industry transitions toward electrification.
Strategic Partnerships and Market Positioning
Hyundai and Kia operate independently in India but collaborate globally under the Hyundai Motor Company (HMC) umbrella.
While the brands maintain separate identities and sales channels in India, they benefit from shared procurement strategies and technical synergies. Hyundai supplies engines for several Kia models, including the Seltos and Sonet. The new Talegaon plant and Hyderabad R&D center are expected to drive innovation for both companies, further strengthening their market positions. This collaborative yet independent approach allows Hyundai to leverage scale while maintaining brand distinctiveness.
Demand Outlook and Product Pipeline
Near-term demand trends are expected to remain muted, but the outlook improves from 2HFY26.
Kotak Institutional Equities anticipates weak consumer sentiment and a high base to constrain growth in the immediate term. However, the research expects a turnaround from the second half of FY26, driven by a slew of new and refreshed product launches, particularly in the SUV segment. Hyundai has guided for 26 product launches by 2030, with eight planned over the next two years. Details of these launches will be disclosed in September 2025. The company’s foray into the MUV segment in FY27 is expected to expand its addressable market and drive market share gains.
Mitigating Supply Chain Risks
Hyundai is proactively addressing risks related to rare earth mineral shortages.
The automotive sector is increasingly vulnerable to supply disruptions, especially for EV components such as neodymium/dysprosium magnets and lithium-ion batteries, following export bans from China. Hyundai reports no immediate supply concerns, citing adequate stockpiles and precautionary measures. The company is also localizing component sourcing in line with India’s Atmanirbhar Bharat initiative and exploring alternative supply options to ensure long-term production continuity.
Financial Performance and Valuation
Kotak Institutional Equities values HMI at Rs2,050 per share using the discounted cash flow (DCF) methodology.
The research projects a volume CAGR of approximately 8% over FY2025-28, with revenue expected to grow at a 12% CAGR over the same period. Earnings are forecast to rise at a 13% CAGR, driven by higher volumes, improved product mix, and operational efficiencies. The following table summarizes key financial metrics and forecasts:
| Metric | 2025 | 2026E | 2027E |
|---|---|---|---|
| EPS (Rs) | 69.4 | 71.5 | 87.8 |
| EPS Growth (%) | -6.9 | 3.1 | 22.8 |
| P/E (X) | 26.8 | 26.0 | 21.2 |
| P/B (X) | 9.3 | 7.6 | 6.3 |
| EV/EBITDA (X) | 16.0 | 15.2 | 12.4 |
| RoE (%) | 34.6 | 29.4 | 29.7 |
| Dividend Yield (%) | 1.1 | 1.5 | 1.9 |
Volume and Revenue Assumptions
Hyundai’s domestic and export volumes are expected to grow steadily, with a projected 6.4% CAGR in total volumes from 2024 to 2050.
The research anticipates domestic volumes to rise from 614,717 units in 2024 to 833,650 units in 2030, with export volumes increasing from 163,155 to 235,541 units over the same period. This growth is underpinned by a robust product pipeline and expanding market reach. The average selling price (ASP) is expected to grow at a 4% CAGR, reflecting a favorable product mix and pricing power.
| Year | Domestic Volumes | Export Volumes | Total Volumes |
|---|---|---|---|
| 2024 | 614,717 | 163,155 | 777,872 |
| 2025 | 605,353 | 163,386 | 768,739 |
| 2026 | 629,483 | 179,725 | 809,207 |
| 2027 | 684,952 | 194,103 | 879,055 |
| 2028 | 722,919 | 209,631 | 932,550 |
| 2030 | 833,650 | 235,541 | 1,069,191 |
Key Investment Considerations
Investors should note several critical factors when evaluating Hyundai Motor India.
Operational Excellence: Hyundai’s manufacturing capabilities, automation, and digital integration set it apart from peers.
Product Pipeline: A robust pipeline of new and refreshed models, especially in the SUV and MUV segments, is expected to drive growth from FY26.
Supply Chain Resilience: Proactive measures to mitigate risks related to rare earth mineral shortages and localization of components.
Valuation Upside: The current market price of Rs1,861 offers a potential upside of approximately 10% to the target of Rs2,050.
Dividend Yield: The dividend yield is projected to rise from 1.1% in 2025 to 1.9% in 2027, providing additional return potential.
Actionable Advice for Long Term Investors
Kotak Institutional Equities’ BUY recommendation is underpinned by Hyundai’s operational strengths, strategic initiatives, and attractive valuation.
Despite near-term headwinds, the research expects Hyundai to emerge stronger from FY26, driven by new product launches and market expansion. Investors with a 12-month horizon are advised to consider accumulating the stock at current levels, targeting Rs2,050 per share. The combination of operational excellence, supply chain resilience, and a robust product pipeline positions Hyundai Motor India as a compelling investment in the Indian automobile sector
