Shares of Hyundai Motor India Ltd. have experienced a significant downturn, dropping nearly 20% year-to-date. On Tuesday, the stock settled at Rs 1,854 on the BSE, reflecting a 0.86% daily decline. However, global brokerage firm Macquarie remains optimistic, reaffirming its 'Outperform' rating for the stock.
Macquarie's Positive Outlook and Price Target
Macquarie has set a 12-month target price of Rs 2,301 for Hyundai Motor India, suggesting a potential upside of approximately 24% from Tuesday's closing price. This positive forecast is largely driven by the recent launch of the new Bayon mid-SUV and the anticipated introduction of an entry-level electric SUV, both identified as crucial for the company's volume growth in the fiscal year 2028.
The Bayon: Hyundai's Strategic Mid-SUV Play
Hyundai recently introduced the Bayon at an entry price of Rs 9.99 lakh. Macquarie's analysis indicates this pricing strategically positions the Bayon between entry-level SUVs (such as the Hyundai Venue and Maruti Suzuki Brezza) and larger mid-SUVs (like the Hyundai Creta and Maruti Suzuki Grand Vitara). While its entry price is below the Rs 11-12 lakh range for larger mid-SUVs, it is higher than the Rs 7-8 lakh bracket for smaller entry SUVs. This pricing also accounts for the higher 40% Goods and Services Tax (GST) applicable to the Bayon, compared to 18% for smaller models.
Currently, the Bayon is available exclusively with a petrol powertrain, offering both manual and electric options. The brokerage suggests that a CNG variant could be launched early next year.
Mid-SUV Segment: A Core Growth Opportunity
Macquarie highlights the mid-SUV segment as a vital growth avenue for Hyundai. This category, encompassing vehicles between 4 and 4.4 meters in length, constitutes 17% of India's total passenger vehicle (PV) sales. The segment has shown robust expansion, with a compound annual growth rate (CAGR) of 21% between 2016 and 2025, significantly outpacing the overall industry's 6% growth.
Hyundai currently holds a dominant position in this segment, capturing approximately 23% of the market share in the second quarter of FY27. The Bayon's introduction is seen as an opportunity for Hyundai to effectively bridge the price gap between its existing Venue and Creta models.
Future Growth Drivers and Potential Risks
Beyond domestic sales, Hyundai Motor is poised for export-led growth, as it will be the sole manufacturer of the Bayon for about 50 developing markets globally. The company's emphasis on technology-led product differentiation, including responsive AI, is also expected to attract younger buyers and carve out a distinct sub-segment within the mid-SUV market.
Despite the strong prospects, Macquarie has conservatively factored in around 5,000 net monthly units for the Bayon in its FY28 estimates, considering the potential for cannibalization of Creta sales. Additionally, the potential launch of the third-generation Creta in 2027, featuring a longer wheelbase, is also on the horizon.
Other Analyst Views
In a separate assessment, Investec has assigned a 'Hold' rating on Hyundai Motor India shares, setting a target price of Rs 2,165.