Hyundai Motor India shares climbed 7.2% on Friday as investors bet on a second-half volume recovery. While the company reported a 35% profit dip last quarter due to production disruptions, analysts remain focused on its expansion plans and new product pipeline.
Shares of Hyundai Motor India jumped 7.2% on Friday, closing at ₹2,164.50. This gain marks the stock's strongest single-day performance since August 2025. The market reaction appears to be driven by optimism from brokerage firms regarding an earnings rebound in the coming quarters, even as the company deals with recent production and cost challenges.
The company’s recent performance shows the impact of supply chain issues. In its latest quarterly report, Hyundai Motor India noted a 35% decline in profit. The company cited a fire at a supplier's facility as a primary reason for the production slowdown. Additionally, the bottom line was affected by lower export numbers and rising costs for raw materials. Despite these problems, the management has held firm on its target for the fiscal year, maintaining an operating margin forecast of 11% to 14% and a volume growth goal of 8% to 10%.
Investors are now looking past the recent dip, focusing instead on potential recovery factors. Analysts at CLSA recently highlighted the company's product strategy and projected improvement in exports as positive signs for the second half of the year. The firm retained its positive outlook on the stock, raising its price target to ₹2,300. Whether the company can reach these growth targets will depend on its ability to sustain production levels and successfully roll out new vehicle models without further delays.
The broader automobile sector also saw positive movement on Friday, with the Nifty Auto index rising by 1.2%. Competitor Mahindra & Mahindra, which recently reported strong June quarter earnings, saw its shares rise by 2.6%. Like Hyundai, Mahindra & Mahindra has faced pressure from increasing costs for materials like steel and rubber, but it has maintained profitability through strong demand for its sport utility vehicles.
For Hyundai Motor India shareholders, the key monitorable in the coming months will be the execution of its capacity expansion plans and the actual sales volume trend after the festive season. Investors will also be watching to see if the company successfully manages its input costs to keep profit margins within the 11% to 14% guidance range.