Shares of Hyundai Motor India dropped over 2% to ₹1,870 in morning trade on December 2, following a sharp decline in November sales. Despite achieving its highest-ever rural contribution for a single month, the Creta-maker reported total sales of 61,252 units, a 7% decrease compared to November 2023, when it sold over 65,000 units.
Sales breakdown
Domestic sales stood at 48,246 units, down 2%, while export sales of 13,006 units marked a sharper decline of 10%. However, SUVs continued to dominate Hyundai's domestic sales, accounting for 68.8% of the total. The company also recorded significant growth in rural sales, with rural contributions reaching an all-time high of 22.1%.
For investors evaluating share market investment, Hyundai's mixed performance signals both challenges in overall sales and resilience in its SUV and rural segments.
Analysts remain optimistic
Despite the sales decline, global brokerages Morgan Stanley and JPMorgan have maintained a positive outlook on Hyundai Motor's stock, both assigning an "overweight" rating.
JPMorgan's take
JPMorgan views Hyundai as a strong contender in India's expanding passenger vehicle market. The brokerage expects the sector to recover in the second half of FY25, which could significantly benefit Hyundai due to its premium product mix and strong SUV portfolio. With SUVs contributing 68% of sales, Hyundai enjoys higher per-unit profitability, giving it a competitive edge.
JPMorgan also highlighted Hyundai's 20% export contribution, which serves as a buffer against domestic market fluctuations. Additionally, the company's efficient capital expenditure practices are expected to drive improved Return on Capital Employed (RoCE).
Morgan Stanley's perspective
Morgan Stanley echoed similar sentiments, emphasising Hyundai's robust positioning in India's premiumisation trend. The brokerage anticipates market share gains fueled by new models and expanded capacity in the coming quarters.
Market reaction
By 10 AM, Hyundai Motor's stock had partially recovered to ₹1,899, down just 1%. Despite the current dip, the shares have gained over 8% in the past month, reflecting investor confidence in the company's long-term prospects.
Key takeaway
While Hyundai's November sales decline has impacted its stock in the short term, analysts remain bullish on its future. For those exploring share market investment, Hyundai's strong SUV sales, rural market growth, and efficient capital deployment make it a promising option for long-term gains.
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