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HMIL is entering a comeback phase, with India increasingly becoming a strategic global hub for Hyundai (HMC). The past 5Y were challenging for HMIL amid a muted 5% domestic volume CAGR and sustained domestic market share loss (FY26: 12.5%; FY21: 17.4%), owing to a relatively lean product cycle (3/5 new models during FY21- 26/FY15-20), limited capacity addition (4% FY21-26 CAGR; >90% utilization), and higher profitability focus (15%/24% FY21-26 EBITDA/EPS CAGR). However, the next 5Y could mark a strong turnaround, led by the Rs450bn investments reflecting India’s growing strategic importance for HMC. This will translate into a stronger product cycle (26 product actions; 7 new nameplates), calibrated capacity increase (FY31: 1.1mnpa units; FY26: 909kpa units), deeper localization (targets 90%; FY26/FY20: 80%/70%), and greater integration with HMC’s global operations (India to be #2 market globally by CY30 vs #4 now). Importantly, we believe that the new product cycle should help reclaim lost market share by addressing key white spaces and drive higher ASPs via rising SUV mix, premiumization, and exports. We build in volume/revenue/EPS CAGR of 11%/15%/16% over FY26-29E (4-6% above street). We believe that HMIL’s market share has bottomed out (expect recovery from Sep26 with the launch of Bayon-based mid-size SUV) and expect it to clock superior growth amid industry moderation (on GST-cut led high base). We retain BUY and raise TP by ~6% to Rs2,600 (26x Sep-28E core PER; rolled forward) from Rs2,450

Product cycle to drive market-share recovery; SUV/EV-led premiumization

The next 5Y should see a meaningful improvement in HMIL’s product cadence, with 26 strategic product actions, including 7 new nameplates (2 in 2HFY27; localized mass-market compact ESUV and Bayon-based mid-size ICE-SUV). This marks a clear shift from the relatively tepid product cycle over the past 5Y (3/5 new models during FY21-26/FY15-20), which should enable HMIL to address key whitespaces and rebuild its market share. The new product actions are aligned with evolving consumer preferences, particularly the premiumization-led shift toward SUVs (68%/56% domestic SUV share in FY26 for HMIL/industry; 52%/40% in FY22) and a multi-powertrain portfolio. HMIL is commensurately expanding its production capacity to 1.1mnpa units by FY31 (FY26: 909kpa units).

India increasingly becoming Hyundai’s global export and technology hub

HMC is also deepening India’s role in its global supply chain, with export volume share rising from 18% in FY21 to 24.5% in FY26, and the management targeting 30% within 5Y. Rising export share should offer an additional growth lever for ASPs. Localization has simultaneously risen from ~70% in FY20 to ~80% currently, with a target of 90%, strengthening India’s cost competitiveness and supply-chain integration. Importantly, HMC is moving beyond ‘Make in India’ toward ‘Create in India’; India is already HMC’s #4 global market (after NA, Korea, and EU), with the management seeing it potentially becoming its #2 market by FY30.

Investment-led transformation should support long-term competitiveness

HMIL plans to invest ~Rs450bn over next 5Y, alongside investments in AI, automation, and EV localization (particularly power electronics/drivetrains; battery packs already localized). With E-PV penetration already exceeding 7% and competition intensifying, these investments should enhance HMIL’s competitiveness and strengthen customer value. Overall, a stronger product cycle, SUV-led premiumization, rising ASPs, higher exports, and deeper integration with HMC’s global operations position India as a key growth and strategic pillar for HMIL over the next 5Y.

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