Emkay Retains ‘Add’ on Hyundai Motor with Rs 1,750 Target Despite Margin Concerns - Here's Why

Brokerage firm Emkay Global has reiterated its ‘Add’ rating on Hyundai Motor India Ltd. (HMIL), maintaining a target price of Rs 1,750, even as the South Korean carmaker reported a stronger-than-expected operating performance in the fourth quarter of FY25. The brokerage cites “near-term margin pressures” and a “subdued growth trajectory” as key reasons for holding a cautious stance.

Despite a 4% and 20% beat on consensus revenue and EBITDA estimates respectively, Emkay refrained from upgrading its recommendation.

“HMIL has established a strong franchise in India, but the muted FY26 growth outlook and near-term profitability pressures stemming from its new plant in Talegaon restrict us from turning more positive on the stock,” the report noted.

Also Read: Hyundai India Q4 Net Profit Drops 4% YoY; Announces Rs 21 Dividend Per Share | Republic World

Upbeat on Long-Term Growth

The Rs 1,750 target is based on a 23x FY27E core price-to-earnings multiple, reflecting Emkay’s expectation of 8% revenue CAGR and 7% core EPS CAGR over FY25–27. The brokerage believes these projections factor in Hyundai’s stable fundamentals while acknowledging headwinds in the near term.

A modest 3% volume growth is forecast for FY26, with domestic demand expected to grow just 1–2%—in line with the broader passenger vehicle (PV) industry. Export volumes are seen growing 7–8%.

Emkay trimmed its FY26 EPS estimate by around 2%, citing margin dilution due to “pre-operational costs” and higher depreciation from the Talegaon facility, which is set to be commissioned in Q3 FY26.

Operational Gains taken into account

In Q4 FY25, HMIL posted consolidated revenue of Rs 179.4 billion, with EBITDA margins improving sharply by 285 basis points quarter-on-quarter to 14.1%, supported by pricing discipline, a favorable product mix, and one-time government subsidies worth Rs 1 billion. However, net profit declined 4% year-on-year to Rs 16.1 billion, and market share contracted by around 100 basis points YoY.

While acknowledging the company’s robust product pipeline—26 new models over five years, including six EVs—Emkay remains wary of a valuation re-rating without a clearer catalyst.