Hyundai Motor India’s September-quarter numbers looked weak at first glance. Profit fell sharply, margins compressed and material costs jumped.
The stock moved the other way.
Hyundai Motor India shares climbed nearly 6% on Thursday morning, touching about ₹1,974 after several brokerages focused less on the Q2 profit decline and more on the company’s coming product launches, export recovery and capacity expansion.
The reaction shows how quickly markets can move beyond one quarter when investors believe the next few quarters may look different.
Q2 Profit Fell 24%
Consolidated profit after tax dropped 24% year on year to ₹1,196 crore.
Revenue moved in the opposite direction.
It rose 18.5% to ₹20,696 crore from ₹17,461 crore a year earlier, taking quarterly revenue above ₹20,000 crore for the first time.
Vehicle volumes were strong too.
Hyundai recorded its highest-ever quarterly sales of 219,072 units, up 15% year on year and 23% sequentially.
Domestic sales increased 19%, while exports rose 4% from a year earlier and 38% from Q1.
So the Hyundai Q2 results were not suffering from weak demand.
The issue was profitability.
Commodity Costs Hit Margins Hard
EBITDA fell nearly 19% to ₹1,975 crore.
The EBITDA margin dropped to 9.5% from 13.9% a year earlier. The Economic Times
Material costs were the main problem.
Total expenses climbed more than 24% to ₹19,302 crore, while the cost of materials rose 29% to ₹15,731 crore.
Higher commodity prices can hit automakers quickly because vehicles use large quantities of steel, aluminium, copper, plastics and precious metals.
Companies can increase prices, but there is always a limit to how much can be passed to buyers without damaging demand.
Hyundai says operating leverage, price actions, a healthier product mix and cost reductions helped contain some of the impact.
Margins even improved slightly from 9.3% in Q1 to 9.5% in Q2.
Hyundai Still Expects Stronger Growth in H2
Management has not cut its broad FY27 targets.
Hyundai continues to expect domestic sales growth of 8%-10% and an operating margin between 11% and 14% for the full year.
That means the company expects a considerably stronger second half.
The argument rests on new models, improving capacity utilisation and better exports.
Managing Director Tarun Garg described Q2 as a milestone quarter for volumes and revenue but acknowledged that commodity costs had weighed heavily on profitability.
He expects momentum to accelerate from here.
That is the same part of the story several brokerages are buying into.
Bayon Starts Hyundai’s New Product Cycle
The recently launched Bayon SUV is central to the outlook.
Hyundai describes it as the beginning of what management calls a “golden product cycle.”
The company also plans to introduce a dedicated mass-market electric vehicle during Q4 FY27.
A stronger product cycle matters because Hyundai has been losing some market share in India’s increasingly competitive passenger-vehicle market.
SUVs are particularly important.
Indian buyers have shifted heavily towards utility vehicles, making new models in that segment critical for volume and pricing.
If Bayon gains traction without cannibalising too much demand from Creta, Hyundai could improve its position in one of the industry’s most profitable categories.
Nomura Sees 31% Upside
Nomura maintained its Buy rating after the results.
It cut its target price slightly to ₹2,442 from ₹2,498, but the revised level still implied around 31% upside from the previous close.
The brokerage expects Hyundai’s new-model cycle to support market-share gains.
It forecasts domestic volume growth of around 11% in FY27, 13% in FY28 and 9% in FY29.
Exports are expected to grow more slowly this year before accelerating significantly in FY28 as Hyundai adds models and expands into more international markets.
Nomura also sees the mass-market EV as a possible positive surprise.
Motilal Oswal Keeps Its Buy Rating
Motilal Oswal also remains positive.
The brokerage maintained its Buy call with a ₹2,300 target price, implying roughly 23% upside from the earlier market level.
It said Q2 profit was broadly in line despite commodity pressure.
Higher volumes, currency benefits, price hikes and cost savings helped offset some of the input inflation.
The brokerage expects a roughly 9% volume compound annual growth rate between FY26 and FY28.
Exports could grow even faster at around 12% annually during that period.
That could help Hyundai Motor India earnings recover even if the domestic passenger-car market remains highly competitive.
Other Brokerages Are More Divided
Not everyone is convinced.
Emkay Global kept a Buy rating but reduced earnings forecasts to reflect commodity inflation.
Centrum upgraded Hyundai to Buy, pointing to the launch pipeline, export recovery, capacity additions and a more attractive valuation after the recent share-price decline.
Jefferies remains the major sceptic.
It has retained an Underperform rating.
The brokerage is concerned about passenger-vehicle and SUV market-share losses and sees a risk that Bayon could overlap with Creta rather than creating entirely new demand.
It also expects relatively modest earnings growth over the next three years.
That difference in views explains why the Hyundai target price debate remains wide even after Thursday’s rally.
The Pune Plant Could Help Volumes
Capacity is another part of the bullish argument.
Hyundai is ramping up operations at its Pune facility and plans to introduce a third shift.
More manufacturing capacity is useful only if demand exists, but the company currently has a healthier product pipeline and a strong export order book to fill it.
Exports are particularly important because India is becoming a larger production base for Hyundai’s global operations.
Selling more vehicles overseas can diversify the company away from depending entirely on domestic market-share gains.
It can also improve plant utilisation if local demand slows temporarily.
The Stock Is Still Down Sharply in 2026
Thursday’s 6% rise looks strong in isolation.
The bigger chart looks less comfortable.
Hyundai Motor India shares remain down roughly 15%-16% in 2026 and more than 17% over the past year.
That correction partly explains why some analysts are becoming more constructive.
A weaker share price has reduced the valuation even as the company prepares several new launches.
The market is effectively being asked to decide whether Q2’s margin weakness is temporary or the beginning of a more persistent profitability problem.
The Product Cycle Now Has to Deliver
The Q2 numbers themselves are mixed.
Revenue exceeded ₹20,000 crore. Sales reached a record level. Domestic demand and exports both improved.
But profit fell 24%, and EBITDA margin dropped more than four percentage points year on year.
That is a large gap between volume growth and earnings growth.
The bullish case for Hyundai Motor India stock depends on that gap narrowing.
If commodity costs stabilise, Bayon performs well, exports accelerate and the mass-market EV adds incremental demand, margins could start recovering.
If those launches fail to gain share while raw-material costs remain high, the weaker Q2 margin may prove harder to fix.
Thursday’s rally suggests investors are willing to give the recovery story a chance.
The next few quarters need to justify it.
Source
Financial Express: Hyundai jumps 6%: Brokerages see up to 31% upside but trim target price — here’s why
