High dividend yield stock to buy now for an upside potential of 20%; Do you own it?

This MNC carmaker Stock is in Focus after Axis Capital initiated coverage with a Buy Target and a potential upside of 19.10 percent from current levels, citing a strong mix of MNC qualities and domestic OEM execution capabilities.

With a market capitalization of Rs. 1,33,366 Crore, the Stock of Hyundai Motor India opened at Rs. 1,630, the same price as percent from yesterday’s close, and after opening it made a high of 1,644 up 0.85 percent. 

Additionally, the shares have recently been listed on the exchanges and were also the first carmaker to list in 20 years, the shares are currently trading 17.10 percent below its 52-week high of 1,970.

Broker Target and Rationale

Axis Capital initiated coverage on the company with a buy rating, and a target price of Rs. 1950, which translates to an Upside of 19.10 percent from current levels.

Broker says that the company has qualities of a Multinational corporation (MNC), its parent being a South Korean Giant Hyundai Motor Company and the execution capabilities match the capabilities of very successful Indian Original Equipment Manufacturers  (OEMs). They have a very strong brand position and Car features & design. 

They also mentioned that premiumization of their vehicles could drive the average selling prices of the company higher by 2.5 percent CAGR, which could translate into an EBITDA margin of 12.90 percent in FY27-28 from the current margin of 12.50 percent. They estimate the valuation to reach 25 times EPS of Rs. 130 by FY27.

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Financial Highlights

The company reported a 2.09 percent YoY decrease in revenue from Rs. 16,590 Crore in Q3FY24 to Rs. 16,242 Crore in Q3FY25. On a QoQ basis, the company reported an increase of 3.75 percent in revenue from Rs. 16,876 Crore in the previous quarter.

Their Net profit saw a decrease of 19.31 percent YoY from Rs. 1,393 Crore to Rs. 1,124 Crore for the same period. On a QoQ basis, the company reported a decrease of 15.99 percent in Net profit from Rs. 1,338 Crore in the previous quarter.

About the Company

Hyundai Motor India Limited (HMIL) is a leading automobile manufacturer in India and a wholly-owned subsidiary of Hyundai Motor Company, South Korea. Established in 1996 and headquartered in Gurugram, Haryana, the company operates a state-of-the-art manufacturing facility in Sriperumbudur, Tamil Nadu.

Written By Abhishek Das

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