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Investing.com - BofA Securities has upgraded Hyundai Motor (OTC:HYMTF) India (HYUNDAI:IN) from Underperform to Neutral and raised its price target to INR2,200.00 from INR1,850.00.
The upgrade follows Hyundai’s Q1 earnings of Rs 13.7 billion, which exceeded BofA’s estimate of Rs 12.2 billion despite an 8% year-over-year decline. The company delivered an EBIT margin of 10.1% and EBITDA margin of 13.3%, outperforming BofA’s 9% EBIT margin estimate.
Hyundai achieved these results despite challenging conditions including reduced quarterly volumes (down 6% quarter-over-quarter), lower government incentives (1 percentage point impact quarter-over-quarter), and increased market discounts rising to 3.5% of average selling price compared to 2% in the previous quarter.
BofA Securities noted that Hyundai mitigated these headwinds through tight cost controls, including a 50 basis point reduction in raw material costs through localization (82% in Q1) and value engineering. The company also improved its model mix with its most profitable model, Creta, increasing to 36% of volumes, and boosted exports to 27% of volumes from 20% in the previous quarter.
Based on Q1 performance, BofA has revised its EBITDA margin forecast upward by 50-70 basis points to 13-13.6% for fiscal years 2026-2027, resulting in a 3-8% increase in earnings per share estimates.
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