Hyundai Motor India Shares Face Pressure Amidst Q3 Earnings Uncertainty
Hyundai Motor India (HMIL) is under investor scrutiny as its stock has declined 20% from its peak in September 2025. This downturn comes as investors reassess the company's growth outlook amidst mixed signals concerning demand and margin pressures, particularly those stemming from its newest plant. The central question now is whether the company's Q3 earnings can reverse this negative trend and stabilize investor sentiment.
Several factors contribute to the cautious outlook. Firstly, the anticipated benefits from the implementation of GST 2.0 appear to be limited. Secondly, December 2025 sales figures reveal a sequential softening, adding to investor concerns. Total sales for December 2025 stood at 58,702 units, marking a 6.6% year-on-year increase compared to December 2024. However, this was a slowdown compared to the 66,840 units sold in November 2025, with domestic volumes falling 15.7% month-on-month.
Analysts, however, point to potential revenue growth supported by exports, a richer product mix, and favorable currency movements. Nuvama Institutional Equities anticipates a mid-single-digit revenue increase year-on-year, further driven by improved product mix, increased exports and INR depreciation. The brokerage also expects EBITDA margins to expand from a low base, supported by localization efforts and reduced discounts.
Despite these positives, several concerns remain. InCred Equities suggests that high overhead costs associated with Hyundai's new plant in Pune could strain EBITDA margins until the plant achieves higher capacity utilization. InCred also believes that the benefits from GST rate cuts will be limited for Hyundai compared to competitors like Maruti Suzuki and Tata Motors, as only 30% of Hyundai’s net sales are covered under the new GST rate. They maintained a 'Reduce' rating on the stock with a target price of Rs 2,023, citing market share pressure as a key risk.
Looking ahead, the Pune plant is expected to produce refreshed versions of the Venue and Exter models, with a new compact car launch planned for FY27F. An India-dedicated electric vehicle is also slated for CY27F.
Hyundai Motor India reported a consolidated net profit of Rs 1,572 crore for Q2 FY26, a 14% year-on-year increase, with revenue from operations inching up 1.2% to Rs 17,460.82 crore. This performance was attributed to strong festive demand, SUV sales, and continued cost optimization measures. However, Q3 FY25 results revealed an 18.5% drop in net profit to ₹1,160.7 crore, and a 1% fall in total income.
The company has also announced a marginal price hike across its model range from January 2026 to offset rising input costs. While the exact model-specific increases are yet to be revealed, the hike will impact models like the Creta, Venue, Exter, Grand i10 Nios, and Alcazar.
Analysts are closely monitoring Hyundai's demand outlook and new product timelines in the coming quarters. Investor focus remains on whether Hyundai's Q3 earnings will demonstrate the company's ability to navigate current headwinds and capitalize on growth opportunities.
The company is scheduled to release its next earnings report on February 2, 2026.
