The much-talked-about Hyundai Motor India IPO has opened. While investor confidence seems to be floundering a bit, the brokerages are mostly gung-ho about the long-term prospects of the stock. Most of the brokerage houses have given a “subscribe” rating to the issue, with a long-term perspective. Here are the top brokerage views on the IPO –
Hyundai Motor IPO: Motilal Oswal says “Subscribe”
At the upper price band, the issue looks reasonably priced compared to Maruti Suzuki which is trading at 29.8x. “We expect Hyundai India to be a key beneficiary of growth in the PV segment due to its strong presence in the SUV segment,” said Motilal Oswal. Also, it is planning a slew of launches in the EV space. The company has planned an overall capex of Rs 32,000 crore to develop capabilities in EVs (including battery assembly and charging stations) and ramp up overall manufacturing capacity over FY23-32. The brokerage firm has given a “subscribe” rating to the issue with a “long-term” view.
Hyundai Motor IPO: Nuvama Wealth Management has no rating but bets on product launches
The brokerage firm met with Hyundai India’s managing director Unsoo Kim, CFO Wangdo Hur, and COO Tarun Garg. During the meeting the management said that the company is well placed to ride the domestic PV sales upcycle with 63% exposure to high-growth UVs (utility vehicles). Also, the company is increasing capacity from 0.82 million to 1.07 million units to support growth in domestic and overseas markets. Thirdly, the company’s focus is on expanding the model portfolio, with four EVs planned over the next few years. They are also considering launching some global models in India. Nuvama doesn’t have any rating on the stock.
Hyundai Motor IPO: SBI Capital says “Subscribe”
Hyundai Motor India is just trailing Maruti Suzuki in market share in the Indian PV industry and it is also the 2nd largest exporter of cars from India. SUVs (higher margin vehicles) contribute a large share of the company’s volumes which is reflected in the relatively higher material and operating margins as well as return ratios. The company is differentiated by strong brand and blockbuster models such as Creta, Alcazar, Venue, and Verna along with advanced technology and high export potential.
According to the brokerage house SBI Capital, the capacity expansion at Talegaon will help the company ramp up both domestic and export volumes. The broking firm has given a subscribe rating to the IPO with a “long-term” view.
Hyundai Motor IPO: Anand Rathi says “Subscribe”
The brokerage house said that the company has consistently held the position as the leading auto OEM in India by sales volume in the mid-size SUV sub-segment from FY19 through Q1 of FY25. The company’s current range of passenger vehicles is designed to appeal to a wide variety of customers, providing options for everyone.
Further, the brokerage firm Anand Rathi said that Hyundai India is dedicated to investing in R&D and introducing new passenger vehicles to enhance their market position. “HMIL follows a premiumization strategy, concentrating on selling higher-end trims with a higher average selling price (ASP) for their respective passenger vehicles,” said Anand Rathi. The issue is fully priced, said the brokerage firm giving a “subscribe” rating with a “Long Term” view to the IPO.
Hyundai Motor IPO: Aditya Birla Money says “Subscribe”
Hyundai has been one of the most recognised brands in India since its inception and the first-mover in various PV categories.
“We believe that the outlook for Hyundai continues to be strong owing to its strong parentage and leveraging HMC’s technology and R&D capabilities and strong balance sheet,” said Aditya Capital Money. However, according to the brokerage house at the upper price band, Hyundai is available at a rich valuation of 26x its FY24 EPS, leaving little on the table for investors. Aditya Birla Money has given a “subscribe” rating to the issue with a “long-term” view.
