Maruti Suzuki Share Price Falls as Emkay Global Retains ‘Reduce’ Rating Ahead of Hyundai Motor India IPO

Emkay Global Financial Services Ltd. has kept its “reduce” rating on Maruti Suzuki India Ltd., with the same target price of ₹11,200. Emkay’s analysis shows that Hyundai Motor India is more profitable than Maruti Suzuki, mainly due to a stronger mix of SUVs (about 63% for Hyundai compared to around 25% for Maruti) and premium positioning, although this is partly offset by Hyundai’s smaller scale.

Hyundai Motor India Files for IPO

On Saturday, June 15, Hyundai Motor India’s parent company, Hyundai Motor Co., filed a Draft Red Herring Prospectus (DRHP) for a Mumbai stock market listing. The Hyundai Motor India IPO will be a complete offer for sale (OFS) of 14.21 crore shares with a face value of ₹10 each, with the South Korean parent company selling up to 17.5% of its stake in the firm.

Maruti Suzuki Shares React

On Tuesday, Maruti Suzuki’s share price fell over 2% on the BSE. Rajesh Bhosale, an Equity Technical and Derivative Analyst at Angel One, noted that Maruti Suzuki’s share price is down about 1.5% today with higher-than-average trading volume. The stock is showing a Black Body Marubuzo candlestick formation, indicating selling pressure from the opening bell. There could be more short-term weakness unless the price goes above the morning’s opening high of ₹12,883, with support around ₹12,340.

Emkay’s research highlights Hyundai Motor India’s focus on premiumization. For Hyundai, the percentage of passenger vehicles (PVs) costing more than ₹1 million rose to 49% in the first nine months of FY24 from 32.4% in FY21, while the volume of SUVs increased to 53% in FY23 from 45% in FY21.

Future Plans for Electric Vehicles

Hyundai plans to continue this premium focus with new model releases across various price ranges and powertrains, including electric vehicles (EVs). The company has four EV models planned, including an electric Creta set for release in the fourth quarter of FY25.

Hyundai is also investing ₹320 billion in EV manufacturing in India, focusing on high localization levels to cut costs and improve price competitiveness. The company benefits from strong support from its parent company in areas like management, R&D, design, and supply chain management, with over 90% local sourcing as of last year. India was one of Hyundai’s top three markets globally in 2023, contributing 18.2% to its global sales, up from 15.5% in 2018.

Export and Capacity Utilization Plans

Hyundai aims to maintain capacity utilization over 90%, compared to about 97% as of December 2023, by balancing domestic and export sales. The company plans to make India an export hub for growing markets such as South Asia, Latin America, Africa, and the Middle East.