Hyundai Motor India Shares Sink 20% From Record High: Will Q3 Earnings Reverse The Trend?

Hyundai Motor India Share Price: Despite the GST 2.0 rollout, Hyundai Motor India’s stock has corrected 20% from the record high it hit in September 2025, as investors reassess the company’s growth outlook amid mixed demand trends and margin concerns linked to its new Pune plant. While analysts continue to project steady revenue growth, supported by exports, a richer product mix and currency tailwinds, limited gains from the GST rate cut and near-term operational headwinds have kept sentiment cautious.

Limited GST benefit: InCred

InCred Equities remains unconvinced about a meaningful uplift from the lower 18% GST rate, noting that only around 30% of Hyundai’s net sales are eligible for the benefit. The brokerage said strong growth over the past three years in exports, parts

and services, and large SUVs has reduced Hyundai’s dependence on products covered under the revised GST rate to just 30% of FY25 net sales value.

Given that demand sensitivity is higher in low-priced compact cars, InCred believes Hyundai’s sales boost from the GST cut will be weaker than peers such as Maruti Suzuki and Tata Motors. This, it said, could prolong Hyundai’s recent underperformance in domestic volume growth versus the market leader.

Capacity expansion and margin risks

On capacity, InCred expects nearly 30% expansion from the newly commissioned Pune plant. The facility is likely to initially produce refreshed versions of the Venue and Exter, while a new compact car launch is planned for FY27F. An India-focused electric vehicle scheduled for CY27F will also remain a key monitorable.

Margins, however, could face near-term pressure. InCred said higher overheads from the new plant may weigh on EBITDA margins until utilisation improves, even though Hyundai’s margin resilience over the past six months has surprised the brokerage.

While InCred raised Hyundai’s FY26F–FY28F EPS estimates by 2–7% due to favourable INR depreciation, it maintained a cautious valuation stance. The brokerage reiterated its Reduce rating with a revised target price of Rs 2,023, citing market share pressure as the key downside risk and success of new product launches as the main upside trigger.

December sales: Sequential slowdown

Hyundai Motor India reported total sales of 58,702 units in December 2025, up 6.6% year-on-year compared with December 2024. However, sales declined sequentially from 66,840 units in November 2025.

Domestic volumes fell 15.7% month-on-month to 42,416 units, while export volumes eased 1.3% to 16,286 units.

Exports continued to provide support, rising 26.5% year-on-year in December, broadly in line with the 26.9% YoY growth recorded in November. In November, total sales had increased 9.1% YoY, aided by a 4.3% rise in domestic volumes.

Can Q3 revive the stock?

For Q3, Nuvama Institutional Equities expects revenue growth in the mid-single digits, driven by a better product mix, higher exports and INR depreciation on a year-on-year basis. EBITDA margins are expected to expand from a low base, supported by localisation initiatives and lower discounts. However, Nuvama flagged demand outlook and new product timelines as key risks.

Morgan Stanley has retained its Overweight rating with a target price of Rs 3,066, but warned of potential margin pressure in the second half due to new facility ramp-ups and higher depreciation. It expects margins to recover from FY27 as volumes scale up. After Q2, Morgan Stanley cut its volume and EBITDA margin estimates by 1–3% and 30–40 basis points, respectively, and lowered FY27–FY28 EPS forecasts by 6–9%. Despite near-term headwinds, it remains positive on medium-term recovery prospects.

Citi, which has a Buy rating and a target price of Rs 2,900, said near-term cost pressures could arise from the Pune plant start-up, which may add 20–25% in overheads. After Q2, Citi trimmed its FY26–FY28 EBIT and PAT estimates by 1–2% and continues to prefer Maruti Suzuki and Mahindra & Mahindra over Hyundai in the auto space.