Skid marks on the quarter but Hyundai Motor India keeps its grip

Volume and revenue dips mar Q1, but rural traction and export gains keep automaker from sliding off course

Hyundai Motor India’s stock has climbed 27 per cent over the past three months to ₹2,181, outpacing listed peers Mahindra & Mahindra (M&M), Tata Motors, and Maruti Suzuki India. While Maruti and Tata Motors saw declines in market value during this period, M&M’s gains were under 8 per cent. 

The company’s tightly packed launch calendar, expanding sport utility vehicle (SUV) lineup, and efforts to fill product gaps are expected to lift its market share through calendar year 2026. In the short run, however, the stock may not find much room to rise further after its recent rally, with demand across the sector showing signs of fatigue. 

Retail sales in July suggest Hyundai has clawed back ground. It overtook M&M to reclaim the No. 2 spot, selling 42,661 units and gaining 30 basis points in market share month-on-month. 

Factory despatches, including exports, held steady in July at 60,073 units, with domestic sales at 43,973. SUVs made up a record 71.8 per cent of Hyundai’s monthly domestic sales, the highest since it began operations.

 

Still, demand remains subdued. The impact on volumes was evident in the April–June quarter (Q1) of 2025–26 (FY26). Overall revenue slipped 5.4 per cent, weighed down by a 6.1 per cent drop in volumes. While domestic revenue fell 10.2 per cent, this was partly offset by stronger exports and a slight rise in average selling prices.

 

Margins, however, held up better than expected. Analyst Aniket Mhatre of Motilal Oswal Research said: “Hyundai was able to maintain margins despite weak volumes and higher discounts, which is commendable. Margin resilience was driven by an improved mix in both domestic and export markets and lower input costs.” 

 

Most brokerages expect wholesale volumes to remain in the slow lane, with Hyundai potentially trailing the broader sector. That said, the company has a packed pipeline of 26 launches by 2030, including eight over the next two years. Analysts Rishi Vora and Apurva Desai of Kotak Research wrote: “We expect near-term demand trends to remain muted due to weak consumer sentiment, limited launches, and a higher base. However, we expect the industry trends to recover in the second half of FY26, with Hyundai gaining share through new SUVs and multi-purpose vehicles across multiple powertrains.” They have maintained a ‘buy’ rating with a target price of ₹2,350.

 

Hyundai’s expanding presence in rural markets is another positive. Rural sales now account for 22.6 per cent of total volumes, up from 19.9 per cent a year ago. The company is banking on favourable monsoons, higher minimum support prices, and ongoing infrastructure improvements to strengthen rural demand.

 

Despite potential tariff risks, Hyundai is positioning India as an export hub for both emerging and select developed markets. Exports rose 13 per cent in Q1FY26, and the company expects 6–7 per cent growth for the full year. While emerging markets drove Q1, Hyundai sees a slow pickup in other geographies as well.

 

Even with a healthy launch pipeline and a broader strategic push, the stock’s recent upmove leaves limited upside in the near to mid-term, according to ICICI Securities. Analysts Shashank Kanodia and Bhavish Doshi remain optimistic about the company’s cash-rich balance sheet, solid cash flows, and return on capital employed of over 30 per cent. However, they have downgraded the stock to ‘hold’, valuing it at ₹2,220.

 

Motilal Oswal Research continues to view Hyundai as a strong player in India’s premium segment, thanks to its SUV-heavy portfolio. The firm has reiterated its ‘buy’ rating with a target price of ₹2,408.