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Hyundai Motor Gets UBS' 'Buy' Initiation On Capacity Expansion, Premiumisation
- UBS has initiated coverage on Hyundai Motor India Ltd. with a ‘buy’ rating and a price target of Rs 2,350, citing the company's strategic capacity expansion and growth trajectory.
- Hyundai is set for a strong comeback, driven by its new optimisation-led strategy, upcoming plant in Maharashtra to increase production capacity by 30%, and positioning India as a global export hub.
- UBS expects a significant increase in domestic volume growth by 10% between fiscal 2026 and fiscal 2028, along with an 11% annual rise in export volumes.
- Hyundai's success is attributed to its premiumisation and technology adoption, offering upmarket features like sunroofs, GDi engines, DCT gearboxes, and ADAS.
- While Hyundai underperformed in volume growth, it maintained strong revenue and operating profit figures due to its product mix and pricing power, with higher EBIT margins compared to industry peers.
- UBS forecasts a 16% Ebitda CAGR during fiscal 2026–2028, supported by operating leverage and growing export share, despite risks such as overdependence on the Creta and potential launch missteps.
- Hyundai's focus on growth, product innovation, and premium positioning, alongside its pipeline of 26 new models by 2030 and entry into hybrids, justifies a bullish outlook and long-term investment, according to UBS.
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