Nomura has maintained a 'Buy' rating on Hyundai Motor India, projecting a rebound in vehicle volumes for the second half of fiscal year 2027. Despite a 35% drop in profit during the first quarter, the company plans to drive growth through 26 new product launches and strategic price increases.
Nomura has reiterated its 'Buy' recommendation for Hyundai Motor India, expressing confidence in the automaker's ability to recover volume growth in the second half of the current fiscal year (2HFY27). This outlook arrives at a time when the broader automotive industry is navigating complex challenges, including supply chain constraints and shifting consumer demand.
The optimism from the brokerage is primarily anchored in a robust product launch pipeline. Hyundai Motor India has outlined an ambitious plan to roll out 26 new models between fiscal years 2026 and 2030. Key upcoming launches include a mid-size SUV scheduled for the festive season, followed by a compact electric vehicle (EV) SUV. These products are central to the company’s strategy to increase its market share to over 15% by 2030.
Investors must weigh this growth potential against recent financial performance. In the first quarter of fiscal year 2027, the company reported a 35% decline in net profit, which fell to ₹889 crore. This dip was largely attributed to production disruptions, which the company views as a temporary setback. Unlike many of its peers, Hyundai Motor India maintains a virtually debt-free balance sheet, which provides the company with more financial flexibility to fund its expansion plans and navigate periods of slower growth.
To counter rising costs and protect profit margins, the company has announced a price hike of up to 1% across its vehicle portfolio, effective from September 2026. Management has reaffirmed its EBITDA margin guidance for the full fiscal year 2027, projecting it to remain within the 11-14% range. This guidance depends on the company's ability to manage discounts more effectively and maintain a healthy product mix.
While the growth outlook remains positive, several factors could impact the company's performance. The Indian automotive sector is facing intense competition, and any escalation in raw material or commodity costs could pressure margins. Furthermore, the company remains sensitive to macroeconomic uncertainties that could dampen consumer demand or disrupt production schedules. The ability to successfully execute the upcoming festive season launches is a critical monitorable, as it will determine whether the company can achieve the projected volume recovery in the coming quarters.