Hyundai Motor India has performed better than an estimate in the June quarter. It has good growth hand in export volume. The company is focusing on local components in production in India. However, weak demand in the domestic market affected the company’s performance. Revenue declined by 5.4 per cent year -on -year basis. Export volume rose 13 per cent year after year. Volumes increased by 28 per cent to African countries, while Mexico’s volume increased by 14 per cent.
Average selling price increases
Hyundai Motor India Ltd (HMIL )’s average selling price (ASP) rose 0.7 percent. It has good product mixes. However, the ASP of Export declined on a quarterly rate quarter basis. The average discount rose to 3.4 per cent of ASP in the June quarter. It was 2 percent in the March quarter. The company has taken several steps to reduce the cost. However, it seems that this will not reduce the pressure on the margin. In the June quarter, the company’s Abidta margin declined by 20 basis points on a year -on -year basis.
Effect of more discount on margin
Customers had more discounts and bounce in the prices of raw materials on the company’s Abidta margin. The prices of some other metals including steel saw a jump. Due to this, despite good growth in export, the company failed to increase profits. Passenger vehicle demand in India was weak in the June quarter. The management of the company says that there may be lethargy in demand. After that there may be recovery in demand. Demand is expected to have a positive effect of better monsoon and festive season.
Export growth expected to be good
HMIL estimates that the growth of exports in FY26 may be 6-7 percent. The company is increasing the focus on foreign markets given the challenge in the domestic market. The company wants a 30 per cent stake in the total revenue by 2030. It was 22 percent in FY25. This will provide support to growth in the long term. Also, diversification will also increase. Improvement is shown in the rural market. Rural Market stake in total sales in the June quarter reached 22.6 per cent.
Plan to launch many new models
Rural is 47 percent of the company’s distribution network and 53 percent in the Urban Market. The company has opened 3 out of every 10 new outlets in rural markets. About 75 percent of the districts of the country have the presence of the company. The company has planned to launch 26 models by 2030. This includes new models, updates and product innovations. The company will launch 8 models in FY26 and FY27. The demand for SUV remains good. The company holds 69 per cent stake in the company’s total volume.
Should you invest?
Hyundai wants to strengthen its portfolio with the launch of electric vehicles and ICE. This will also support Ebitda. The company will also get the benefit of higher localization. In 2024, it has increased from 78 per cent to 82 per cent in 2024. Currently, FY27 is trading at 27 times the estimated earnings of the stock. This is more than the 22.6 times Maruti. In the last 6 months, this stock has risen around 9 percent.