Hyundai Shares Rise Despite Profit Drop

Hyundai Motor India shares jumped over 5% on Thursday, 29 October, following its Q2 FY27 results, even though quarterly profit fell due to higher material costs. The company reported a 23.9% year-on-year drop in consolidated net profit to ₹ 1,196.16 crore for the quarter that ended in September, compared with ₹ 1,572.25 crore in the same period last year.

Sales And Expenses

Hyundai Motor India Ltd recorded its highest-ever quarterly sales of 2,19,072 units, which is a 15% jump from last year and up 23% sequentially. Revenue from operations rose to ₹ 20,696.05 crore from ₹ 17,460.82 crore a year earlier. Total expenses increased to ₹ 19,302.18 crore from ₹ 15,566.06 crore, driven by higher material costs that weighed on profits. Managing Director and Chief Executive Officer Tarun Garg said quarterly revenue crossed ₹ 20,000 crore for the first time since the company started, while noting that high commodity costs affected profitability. Garg expects sales momentum to speed up in the second half of FY27, backed by new vehicle launches like the Bayon and a mass-market electric vehicle coming in Q4 FY27.

Brokerage Views

Motilal Oswal Financial Services kept a 'Buy' rating on the stock with a target price of ₹ 2,300, expecting an earnings CAGR of around 16% over FY26 to FY28. Nuvama Institutional Equities retained a 'Buy' rating with a target price of ₹ 2,500, noting plans to launch seven new nameplates by FY30, including a compact electric SUV in February 2027. Elara Securities also kept a 'Buy' rating and revised its target price to ₹ 2,400, stating that Hyundai's market share and margins may have bottomed out in the first half of the year.

Stock Movement

The stock opened at ₹ 1,910 on the BSE, reached an intraday high of ₹ 1,972.90, and hit a low of ₹ 1,893. Deepesh Sarawagi, Technical Research Analyst at Choice Broking, said the stock rebounded from the ₹ 1,820 to ₹ 1,900 demand zone but still trades below key exponential moving averages, keeping the broader trend weak with resistance near ₹ 2,020. Gaurav Arora, Head of Research at SAHI, added that the price action shows stability rather than a confirmed trend reversal.

Context

Automakers often face pressure on their net profits when raw material and commodity prices go up, even if vehicle sales volume and total revenue reach record highs. Brokerage firms evaluate long-term stock value by looking at future product launches, expected market trends, and overall industry demand rather than just a single quarter's profit drop.