Hyundai Motor India Shares Surge on Nuvama's Bullish Outlook

dai Motor India Ltd. (HMIL) shares climbed 2% on July 11, 2025, following Nuvama Institutional Equities' initiation of coverage with a 'Buy' rating and a target price of ₹2,600, implying a 24.3% upside. The brokerage's optimism is driven by HMIL's robust product pipeline and strong backing from its parent, Hyundai Motor Company (HMC), positioning it to capture a 15% domestic market share by FY28. Ambitious Product Roadmap Nuvama projects HMIL will launch 26 new models by FY30, including 7-8 all-new vehicles, with a focus on SUVs and electric vehicles (EVs). Over the next 18 months, the company is expected to introduce a new compact SUV, a micro E-SUV to compete with the Tata Punch EV, and multiple refreshes of models like Venue, Verna, and Exter. This aggressive rollout is anticipated to boost HMIL’s domestic market share from 14% in FY25 to 15% by FY28, supported by growing demand for SUVs and premium features like sunroofs, Advanced Driver-Assistance Systems (ADAS), and automatic transmissions. Financial Strength and R&D Support Hyundai Motor India benefits from HMC’s global prowess as the third-largest mass-market passenger vehicle (PV) player, with $129 billion in revenue in CY24 and a presence in over 200 countries. HMC’s annual R&D investment of $2.9 billion (2.5% of revenue) enables HMIL to integrate cutting-edge automotive technology, fast-tracking portfolio expansion. The company’s industry-leading 100% success rate in recovering product development costs within four years underscores its operational efficiency. Financial Projections Nuvama forecasts a 9% revenue CAGR and a 12% EBITDA CAGR for HMIL over FY25–28, driven by a richer SUV mix and premiumization. The brokerage estimates annual free cash flow of ₹4,300 crore during FY26–28, with net cash rising from ₹7,800 crore in FY25 to ₹17,200 crore by FY28. HMIL’s average Return on Invested Capital (RoIC) is projected at 57%, reflecting strong financial health.