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Imagine a bustling jewellery market teeming with diamonds and gold. Amidst this glittering chaos, a small stall is trying to sell handcrafted gemstones. Even as newer and shinier outlets keep cropping up, all vying for attention, this gemstone store offers some of the oldest yet valuable jewels at a discount. Though they lack immediate sparkle, these rare gems reveal their value to the discerning buyer. This is how South Korea appears for many experts in global capital markets: a trove of undervalued gems, overshadowed by brighter, more aggressively marketed investment options. This undervaluation, known as the "<keyword id="24399183" type="General" weightage="20" keywordseo="korean-discount" source="keywords">Korean Discount</keyword>," reflects how South Korean companies are priced much lower than their global peers despite robust fundamentals — strong financial performance and consistent profitability. Contributing factors are many, ranging from opaque governance structures to geopolitical risks. But the fact stays, if you are a seasoned conglomerate listed in South Korea, you are likely undervalued. <keyword id="19906087" type="General" weightage="20" keywordseo="hyundai" source="keywords">Hyundai</keyword> Motor India Ltd. (HMIL), a subsidiary of the Korean giant Hyundai Motor Company (HMC), recently sought to escape this valuation trap by listing in India, a market where investor optimism commands premium pricing. But its valuation raised many eyebrows! Now that a month and a half has gone by since its listing, time is apt to examine if this gamble paid off. Will <keyword id="93460" type="General" weightage="100" keywordseo="hyundai-india" source="Orion">Hyundai India</keyword> justify its high valuation? Or does the listing highlight broader questions about the overheated valuation dynamics of Indian markets? A record-breaking <keyword id="19898327" type="General" weightage="20" keywordseo="ipo" source="keywords">IPO</keyword> but questions remain Hyundai Motor India’s mega Initial Public Offering (IPO), launched in October 2024, broke records by raising ₹27,870 crore, making it India’s largest-ever IPO. The offer was oversubscribed by 2.37 times, highlighting robust demand. But many investors remained sceptical: was this IPO an honest attempt to expand Hyundai’s footprint in India or was it trying to offer a way to cashout for existing investors and promoters? Or perhaps, is it an attempt by the Korean chaebol — a large family-owned business conglomerate — to break free from the aforementioned “Korean Discount”? When shares listed on October 22, these concerns seemingly weighed on the minds of most investors and the stock promptly dipped 5% below the issue price on the day. A tepid grey market performance had already foreshadowed this muted debut in the Indian markets. Now, after almost 35 trading sessions on Indian market, the stock remains almost exactly at price it listed on October 22 at Rs 1820—no gain, no loss. <h3>The gamble of hyper-valuation</h3>Much of this hesitation stemmed from Hyundai’s valuation. On listing, Hyundai was valued at $18 billion, positioning it as one of India’s most valuable automotive companies. However, such high valuations often temper investor enthusiasm, resulting in more cautious short-term outcomes. For most investors, the Price-to-Earnings (P/E) ratio is the most preferred parameter to gauge if a company is overvalued or undervalued. With a P/E ratio of 26.3, HMIL was priced significantly above the Indian automotive industry average of 24.4. Globally, automotive companies operate with much lower P/E ratios, reflecting mature market conditions and slower growth trajectories. HMIL’s South Korean parent Hyundai Motor Company (HMC) trades at a meagre 3.07, believe it or not! For Indian investors, the high premium hinted at overvaluation despite Hyundai’s strong domestic position. Such stark difference in valuation obviously sparked debates — is the Indian market assigning a premium to Hyundai Motor India’s growth potential, or is it simply reflecting the general exuberance around the prospects of the Indian economy? Another concern is the allocation of IPO proceeds. Hyundai’s IPO was structured as an offer for sale (OFS), meaning all funds raised would flow to the parent company rather than Hyundai India’s operations. Although Hyundai has committed to investing in R&amp;D for EVs and hybrids, critics argue that the lack of immediate reinvestment in India’s operations reflects a missed opportunity for domestic growth. Despite the early disappointment, Hyundai was confident that the valuation was fair. It did have some factors going for it, in addition to the fact that other auto giants like Mahindra &amp; Mahindra and <keyword id="19909974" type="General" weightage="20" keywordseo="maruti-suzuki" source="keywords">Maruti Suzuki</keyword> command even higher P/E ratios. And looking at the company fundamentals, it does seem like Hyundai is playing a long-term game. <h3>Hyundai in India: A proven track record</h3>Despite the initial stumble, Hyundai India’s long-term story is compelling. Since entering the Indian market in 1996, the automaker has sold over 8 million vehicles and firmly occupies the second spot in the domestic passenger vehicle market, trailing only Maruti Suzuki. Hyundai’s blockbuster SUV offerings, like the Creta and Venue, have been critical in building this dominance. Despite some challenge from Maruti Suzuki Brezza and Tata Punch, Creta has retained the tag of ‘most-selling SUV in India’ successfully so far this year. <div type="image" title="Hyundai" agency="Business Insider India" msid="116156234" hostid="261" caption="&amp;lt;p&amp;gt;Selling over 17,000 units per month on average this year, Creta has edged past major competitors to be the most-selling SUV in India in 2024. As Indian consumers preference continues to shift gradually towards premium products over budget segments, Hyundai stands to benefit (Wikimedia Commons / Canva)&amp;lt;/p&amp;gt;"></div> Selling over 17,000 units per month on average, Creta has edged past major competitors to be the most-selling SUV in India in 2024. As Indian consumers preference continues to shift gradually towards premium products over budget segments, Hyundai stands to benefit (Wikimedia Commons / Canva) Hyundai India’s market share of 14% in October 2024 underscores its clout. The company’s ability to tap into India’s premiumisation trend, where consumers increasingly prefer high-end vehicles, positions it well for growth. With plans to expand in electric vehicles (EVs) and hybrid technology, Hyundai is poised to capitalise on both domestic demand and export opportunities. The company’s ability to capitalize on its strong brand, extensive dealer network, and leadership in segments like SUVs and exports will determine its future performance. Hyundai’s strategic focus on expanding electric vehicle production also aligns with global trends towards sustainability, potentially positioning it as a leader in the segment. By listing in India, Hyundai aims not only to expand its operations but also to make India a global manufacturing and export hub for its products, especially SUVs and EVs. Therefore, despite early setbacks, Hyundai’s gamble seems to have paid off. The stock has rebounded, gaining 5% in the past month. More good news came in this week, as positive projections from Morgan Stanley and JPMorgan forecast an impressive 17-28% upside for the stock over the next year, reflecting growing investor optimism. <h3>A strategic pivot from the Korean Discount?</h3>The Korean Discount has long plagued South Korea’s chaebols, including Hyundai. Experts attribute this to several factors: <ul> <li>Chaebol Governance: South Korea’s conglomerates, known as chaebols, are often criticised for opaque governance structures and excessive family control.</li> <li>Geopolitical Risks: Tensions with North Korea contribute to investor caution, adding a layer of perceived risk.</li> <li>Limited Domestic Liquidity: South Korea’s relatively small investor base can constrain market activity and valuation potential.</li> </ul> By listing in India, Hyundai sought to unlock better valuations for its subsidiary, leveraging the optimism of Indian markets. India’s stock market has a trailing P/E ratio of 24.4, far above South Korea’s Kospi average of 16-17. The Indian market’s appetite for high-growth stories provides a fertile ground for companies like Hyundai to escape the valuation constraints of their home market. A successful IPO could encourage other such conglomerates to follow suit, setting a precedent. While Hyundai India has a robust track record, its future success hinges on navigating key challenges: <ul> <li>Supply Chain Vulnerabilities: Hyundai relies heavily on its Chennai plant, making it vulnerable to disruptions.</li> <li>Intensifying Competition: Domestic rivals like <keyword id="19906967" type="General" weightage="20" keywordseo="tata-motors" source="keywords">Tata Motors</keyword> and MG Motors are making aggressive inroads into the EV market.</li> <li>Policy Risks: The automotive sector’s reliance on government incentives for EVs and hybrids adds a layer of unpredictability.</li> </ul> High valuations come with risks. Hyundai will need to prove that it can sustain its growth trajectory in India, fend off competition from established players like Maruti Suzuki and Tata Motors, and navigate challenges such as supply chain disruptions and regulatory hurdles. If Hyundai successfully capitalises on its strong brand and market leadership, it could not only redefine its value but also serve as a case study for other Korean companies seeking better recognition and valuations in global markets. <h3>Is Hyundai saga a reflection of overheated Indian markets?</h3>The bigger question here is, does Hyundai’s IPO highlights a broader narrative about Indian markets’ premium valuations? With a trailing P/E ratio of 24.4, Nifty 50 index is among the highest in emerging markets. India’s stock markets consistently command a premium due to robust retail participation, strong economic growth prospects, and a burgeoning middle class. While this premium reflects optimism about India’s long-term growth story, it also signals potential risks of overvaluation, particularly in sectors like technology, automotive, and consumer goods. With a record ₹94,017 crore outflow by Foreign Portfolio Investors (FPIs) in October 2024, concerns about overheated valuations are mounting. Sustaining such unprecedented valuations required companies to consistently perform above global averages, and retaining robust earnings growth quarter after quarter remains a challenge in today’s uncertain world. For Hyundai, the high valuation is both an opportunity and a risk. While it underscores investor confidence, it narrows the margin of safety, making the stock vulnerable to corrections during economic downturns. Take for example, the high-profile IPO of Life Insurance Corporation of India (LIC) that raised over ₹21,000 crore. Its listing was met with disappointment as the stock began trading at a 9% discount to its issue price, and subsequent performance has remained subdued. LIC’s post-IPO journey also highlights how inflated valuations can lead to long-term underperformance, as the stock gave only 12% return over the past 30 months when even the Nifty 50 index went up by over 44%. This happens when when the company's growth narrative fails to align with its pricing. Despite being a household name with a dominant market share, LIC's stock has struggled to meet expectations, partly due to concerns about its operating efficiency and the limited use of IPO proceeds for growth initiatives. Make no mistake, Hyundai Motor India’s IPO is a landmark event! It showcases the potential for Korean companies to leverage emerging markets like India for better valuations. It also shows that strong fundamentals can help justify a company such premium valuations even amidst bearish economic prospects. However, it also serves as a cautionary tale about the risks of overvaluation. For Hyundai, the next steps involve proving its long-term growth story, navigating competitive challenges, and maintaining investor confidence. For Indian markets, Hyundai’s IPO underscores the need to balance optimism with realistic expectations as they continue to evolve as global investment hotspots. To sustain the country’s economic narrative as a land of unmatched opportunities, corporate India must work on improving long-term fundamentals and mitigating long-term risks. As global investors watch closely, Hyundai India’s success or failure could shape how international companies view India as a listing destination in the years to come.

Tackling the 'Korean Discount': A deep dive into curious case of Hyundai Motor India's market listing

Indian companies across multiple sectors have reported disappointing results in the second quarter of fiscal year 2025, notes a new JM Financials report. Consequently, their poor performance has triggered stock price corrections for affected companies. The brunt of this weaker than expected earnings was largely borne by consumer centric sectors like FMCG (fast moving consumer goods), retail, and auto, which slacked largely due to dampened urban demand. For instance, India's largest automaker, Maruti Suzuki, reported a 5% YoY decline in its total domestic passenger vehicle wholesales, largely on the back of pent-up inventory. Similarly, Honda reported a staggering 23% YoY dip in its total sales during October 2024. A recent report by Bernstein noted that around 48% of the companies listed on the NSE100 index missed their earnings estimate for Q2FY25, the highest since March 2020. Most companies have mentioned deteriorated domestic demand, urban slowing, macroeconomic risk, and margin pressures as the main reasons behind the dip. "The quarter's earnings have made investors nervous," noted the JM Financials report. The challenging environment stems from multiple factors: softening consumer demand, rising input costs, and companies' limited ability to increase prices. Moreover, this is not limited to just one quarter. Companies have been reporting weak, single-digit earnings growth for the last six consecutive quarters. Data from India Data Hub also suggests that corporate profits of listed companies plunged by as much as 3.4% during the quarter ended September 30, 2024. This is in stark contrast to the year-ago period, where they had shot up by over 40% The oil and gas sector had a difficult quarter, with refiners hit by weak margins and city gas distributors struggling with higher input costs. Financial institutions showed mixed results. While government-owned banks reported strong numbers, microfinance institutions and some private lenders faced massive difficulties with their unsecured loans. Most notable amongst this was the case of IndusInd Bank, which saw its net profits dip by 40% amidst burgeoning provisions, which climbed 87% to Rs 1,820 crore in Q2, as against Rs 974 crore reported in the year-ago period. <h2>Markets head southwards</h2>The selling trend by FPIs has dragged down the major Indian indices, the Nifty 50 and Sensex, both of which have dropped by around 8% since the beginning of this selling spree in October. According to National Securities Depository Ltd. (NSDL) data, FPIs offloaded equities worth a significant Rs 19,994 crore in just the first five trading sessions of November last week. The impact is clearly visible on Indian stock markets. Data suggests that while every sector in October closed the month in red, auto, oil and gas, and consumer durables were the most badly hit, each declining by as much as 10% during the month. Another indicator underlining the inherent weakness of the market was that the month saw only 242 stocks hit their 52-week high, significantly below the usual monthly average of 310.

India Inc. stares at an earnings dearth in Q2, FMCG, auto, and consumer durables falter

<ul><li><keyword id="19931193" type="General" weightage="20" keywordseo="Maruti-Suzuki-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Maruti Suzuki India" meta.hostid="261" meta.entityid="Maruti Suzuki India">Maruti Suzuki India</keyword> on Friday reported a 47.8% rise in <keyword id="19942166" type="General" weightage="20" keywordseo="net-profit" source="keywords">net profit</keyword> for the March quarter of <keyword id="19910780" type="General" weightage="20" keywordseo="FY24" source="keywords">FY24</keyword>.</li><li>The auto maker reported a net profit of Rs 3,877.8 crore, on account of higher sales volume and favourable commodity prices.</li><li> The auto major had reported a net profit of Rs 2,623.6 crore in the year-ago period.</li></ul>The country's largest car maker <keyword id="19909974" type="General" weightage="20" keywordseo="maruti-suzuki" source="keywords">Maruti Suzuki</keyword> India on Friday reported a 47.8 per cent rise in net profit for the March quarter of FY24 to Rs 3,877.8 crore, on account of higher sales volume and favourable commodity prices. The auto major had reported a net profit of Rs 2,623.6 crore in the year-ago period, Maruti Suzuki India said in a regulatory filing. "For the first time, the company surpassed annual total sales milestone of 2 million units in FY24. The company continued to be the top exporter for the third consecutive year, now contributing 41.8 per cent of total passenger vehicle exports from India," the company stated. Maruti Suzuki shares were trading at Rs 12,687.05 apiece at the day's close, down 1.7 per cent from its previous close on the BSE. SEE ALSO:<a href="https://www.businessinsider.in/business/auto/webstories/ultraviolette-f77-mach-2-electric-sports-bike-launched-in-india-starting-at-2-99-lakh/slidelist/109615934.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/auto/webstories/ultraviolette-f77-mach-2-electric-sports-bike-launched-in-india-starting-at-2-99-lakh/slidelist/109615934.cms" target="_blank">Ultraviolette F77 Mach 2 electric sports bike launched in India starting at ₹2.99 lakh</a><a href="https://www.businessinsider.in/tech/mobile/news/realme-c65-5g-with-5000mah-battery-120hz-display-launched-starting-at-10499/articleshow/109619597.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/realme-c65-5g-with-5000mah-battery-120hz-display-launched-starting-at-10499/articleshow/109619597.cms" target="_blank">Realme C65 5G with 5,000mAh battery, 120Hz display launched starting at ₹10,499</a><a href="https://www.businessinsider.in/tech/news/jiocinema-introduces-new-ad-free-premium-plans-starting-at-29/articleshow/109581033.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/news/jiocinema-introduces-new-ad-free-premium-plans-starting-at-29/articleshow/109581033.cms" target="_blank">An Ambani disruption in OTT: At just ₹1 per day, you can now enjoy ad-free content on JioCinema</a>

Maruti Suzuki Q4 net profit rises 47.8% to ₹3,877.8 crore

Shares of <keyword id="19931193" type="General" weightage="100" keywordseo="Maruti-Suzuki-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Maruti Suzuki India" meta.hostid="261" meta.entityid="Maruti Suzuki India">Maruti Suzuki India</keyword> jumped more than 2 per cent on Thursday in the morning trade after the homegrown automobile major reported a 47 per cent jump in net profit to Rs 3,650 crore for the June quarter. The stock of the company climbed 2.30 per cent to trade at Rs 13,417.05 apiece on the NSE. On the BSE, it rose 2.06 per cent to trade at Rs 13,439.55 per piece. Later, in the intra-day trade, the shares of the Gurugram-based automobile major advanced to hit a 52-week high of Rs 13,680 and 13,675 apiece on the NSE and BSE. In the morning trade, the company's market valuation also rose by Rs 15,941.78 crore to Rs 4.29 lakh crore on the BSE while it stood at Rs 4.30 lakh crore on the NSE. The 30-share BSE Sensex jumped 127 points or 0.16 per cent to trade at 81,868.34 while NSE Nifty went up 61.40 points or 0.25 per cent to 25,012.55. In a regulatory filing on Wednesday, <keyword id="44883" type="General" weightage="20" keywordseo="Maruti-Suzuki" source="Orion">Maruti Suzuki</keyword> India reported a 47 per cent jump in net profit to Rs 3,650 crore for June quarter, riding on the back of cost reduction efforts, favourable commodity prices and foreign exchange gains. The auto major had logged a net profit of Rs 2,485 crore in April-June FY24. Net sales increased to Rs 33,875 crore in the June quarter as compared with Rs 30,845 crore in the year-ago period, the company said. The country's largest carmaker said it sold 5,21,868 vehicles during the first quarter, up 5 per cent as compared to the same period previous fiscal. The company said it sold 4,51,308 units in the domestic market in the first quarter, an increase of 4 per cent over the same period of FY24.

Maruti Suzuki India stock hits 52-week high after robust Q1 results

Japanese car maker <keyword id="20032993" type="General" weightage="20" keywordseo="Suzuki" source="keywords">Suzuki</keyword> Motor Corporation on Monday said it will continue to expand SUV portfolio in India to recover its overall market share in the passenger vehicle segment. The company, which currently has around 58 per cent stake in <keyword id="44883" type="General" weightage="20" keywordseo="maruti-Suzuki" source="Orion">Maruti Suzuki</keyword> India, said its net sales increased by 732.6 billion yen (15.8 per cent) year-on-year to 5,374.3 billion yen for the last financial year. Operating profit increased by 115 billion yen (32.8 per cent) YoY to 465.6 billion yen. "We will continue to promote the expansion of our SUV models (in India) and aim to recover our total passenger car share," Suzuki Motor Corporation said in a statement. Currently, <keyword id="19950117" type="General" weightage="20" keywordseo="Maruti" source="keywords">Maruti</keyword> Suzuki sells SUV (sport utility vehicle) models like Brezza, Jimny and Grand Vitara in the domestic market. The company's market share has come down to around 42 per cent from over 50 per cent a couple of years back in the domestic passenger vehicle segment on account of limited options in the SUV segment. With the market demand rising for SUVs, the company is in the process of bolstering its presence in the segment and regaining its market share. Suzuki Motor Corp said that in April 2024, a new production line with an annual capacity of 1 lakh units started operations at the Manesar plant. The company said it plans to secure a production capacity of around 40 lakh units in India by FY2030. Suzuki Motor Corp said it expects record sales and profits this fiscal due to higher unit sales. "The company is compiling strategies in various fields, including technology, and will announce the new mid-term management plan by the end of FY2024," it stated. SEE ALSO:<a href="https://www.businessinsider.in/tech/mobile/news/oneplus-nord-ce-4-lite-to-launch-soon-in-india-expected-price-specs-and-everything-we-know-so-far/articleshow/110076267.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/oneplus-nord-ce-4-lite-to-launch-soon-in-india-expected-price-specs-and-everything-we-know-so-far/articleshow/110076267.cms" target="_blank">OnePlus Nord CE 4 Lite to launch soon in India – expected price, specs and everything we know so far</a><a href="https://www.businessinsider.in/stock-market/news/aadhar-housing-finance-ipo-allotment-how-to-check-allotment-gmp-listing-date-and-more/articleshow/110071990.cms" target="_blank"></a> <a href="https://www.businessinsider.in/stock-market/news/aadhar-housing-finance-ipo-allotment-how-to-check-allotment-gmp-listing-date-and-more/articleshow/110071990.cms" target="_blank">Aadhar Housing Finance IPO allotment – How to check allotment, GMP, listing date and more</a><a href="https://www.businessinsider.in/tech/mobile/news/indian-smartphone-market-up-8-5g-smartphones-account-for-over-70-of-shipments/articleshow/110002512.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/indian-smartphone-market-up-8-5g-smartphones-account-for-over-70-of-shipments/articleshow/110002512.cms" target="_blank">Indian smartphone market up 8%, 5G smartphones account for over 70% of shipments</a>

Suzuki says will continue to expand SUV portfolio to recover mkt share in India

<keyword id="44883" type="General" weightage="80" keywordseo="maruti-suzuki" source="Orion">Maruti Suzuki</keyword> India on Friday reported a whopping 80.3% increase in net profit at Rs 3,716.5 crore in July-September quarter driven by its highest ever sales, softening commodity prices, cost reduction efforts and higher non-operating income. The company had posted a net profit of Rs 2,061.5 crore in the second quarter of FY23, Maruti Suzuki India said in a statement. The car maker also said that it recorded its highest-ever quarterly sale volume, net sales and net profit in this quarter. During the quarter under review, the company registered net sales of Rs 35,535.1 crore, against Rs 28,543.50 crore recorded in the same quarter of the previous fiscal, owing to higher sales volume and product mix, it said. The company sold 5,52,055 vehicles during the quarter as compared to 5,17,395 units in the second quarter of last year. Of the 5,52,055 vehicles sold in the July-September period this year, 4,82,731 units were sold in the domestic market while the remaining 69,324 cars were exported, the company said The EBITDA (earnings before interest, taxes, depreciation) margin for the quarter stood at 12.9%. On a year-on-year basis, EBITDA rose nearly 73%, margin expanding by 360 basis points. Raw material costs as a percentage of sales fell 300 basis points from last year to 73.5% from 76.5%.

Maruti Suzuki Q2 profit jumps over 80% on highest-ever sales

Maruti Suzuki Q4 net profit zooms 43% to ₹2,624 crore beating expectations, to add capacity of 1 million vehicles

<ul><li>Sector watchers anticipate robust double-digit year-over-year revenue growth for most 4-wheeler companies </li><li>Analysts are optimistic about <keyword id="42747" type="General" weightage="20" keywordseo="tata-motors" source="Orion">Tata Motors</keyword>’ profit margins due to strong JLR sales. </li><li>Sales volumes of two-wheelers (2W) have experienced a slight year-on-year decline. </li></ul>The <keyword id="46265" type="General" weightage="20" keywordseo="auto-sector" source="Orion">auto sector</keyword> has been recovering, albeit slowly, after the pandemic. The second quarter of the current financial year (FY2024) saw wholesale trends exhibit a mixture of outcomes, with most segments experiencing an increase in sales volumes. Three-wheeler (3W) sales showed a significant year-on-year (Y-o-Y) recovery, while passenger vehicles (PV) saw growth in the mid-single digits, according to the India Autos report by BNP Paribas. However, sales volumes of two-wheelers (2W) experienced a slight year-on-year decline. A closer look at retail volume market share shows that in the 2W segment, <keyword id="6359783" type="General" weightage="20" keywordseo="bajaj-auto" source="Orion">Bajaj Auto</keyword> lost 2.3 percentage points in market share when compared to the same period the year before, while Honda Motorcycle &amp; Scooter India lost 0.9% market share. Meanwhile TVS Motor Company and Suzuki gained market share by 1.7 and 1.1 percentage points respectively in the same time period. In the PV segment, <keyword id="50805" type="General" weightage="20" keywordseo="mahindra-and-mahindra" source="Orion">Mahindra and Mahindra</keyword>, Toyota and <keyword id="44883" type="General" weightage="20" keywordseo="maruti-suzuki" source="Orion">Maruti Suzuki</keyword> India gained market share of 1.6, 1 and 1 percentage points respectively year-on-year, while Tata Motors and Kia lost market share by 0.6 and 1.1 percentage points respectively. Experts anticipate robust double-digit year-over-year revenue growth for most companies, with the exception of Bajaj Auto and Hero MotoCorp Limited. Substantial volume growth in the last quarter has been observed, except for the 2W segments, which has allowed them to take advantage of operational efficiency and a favourable product mix. <cmsannotation type="cmsannotation" annotationid="Analysts are optimistic about Tata Motors’ profit margins" comment="Subhead" text="Analysts are optimistic about Tata Motors’ profit margins">Analysts are optimistic about Tata Motors’ profit margins</cmsannotation> Analysts at BNP Paribas are optimistic about Tata Motors' profit margins due to strong Jaguar Land Rover (JLR) sales. In regards to other companies, they expect mixed or in-line results when compared to consensus expectations. The analysts take a pessimistic stance on the two-wheeler (2Ws) sector, citing expectations of persistently low growth, subdued festive seasons, the disruptive influence of electric vehicles (EVs), and heightened competition that could negatively impact the sector's profitability. However, they express preference for passenger vehicle original equipment manufacturers (OEMs) such as Maruti Suzuki, Mahindra and Mahindra, as well as globally-oriented companies like Tata Motors. These companies are better positioned to achieve sales growth and maintain healthy margins during the economic upswing, particularly due to their disciplined pricing strategies. Price targets (TPs) for select stocks have been increased, taking into account the shift in their valuation basis to September 2024, recent demand trends, and the inclusion of valuation related to Hero MotoCorp's (HMCL) financing subsidiary. They highlight that Maruti remains their top choice among the investments. <cmsannotation type="cmsannotation" annotationid="Expectations for different automakers" comment="Subhead" text="Expectations for different automakers">Expectations for different automakers</cmsannotation> <cmsannotation type="cmsannotation" annotationid="Maruti Suzuki" comment="Subhead" text="Maruti Suzuki">Maruti Suzuki</cmsannotation> For Maruti Suzuki , analysts recommend a "BUY" with a target price set at ₹13,000, while the current price is at ₹12,700. This is based on a price-to-earnings (P/E) ratio of 29 times the estimated earnings per share (EPS) for September 2025. The target multiple remains the same, but it has been adjusted for the next quarter. The target multiple is based on the five-year average next twelve months (NTM) P/E, as per Bloomberg consensus estimates, to account for a gradual recovery in the demand cycle. The target price has increased due to the forward adjustment in valuation. <cmsannotation type="cmsannotation" annotationid="Mahindra &amp; Mahindra" comment="Subhead" text="Mahindra &amp; Mahindra">Mahindra &amp; Mahindra</cmsannotation> For Mahindra &amp; Mahindra, the recommendation is a "BUY" with a target price of ₹1,905 (current price: ₹1,930). The valuation includes a sum-of-the-parts (SoTP) approach, with a target multiple similar to that of Escorts for the Farm Equipment Sector (FES). In the automotive sector, the target multiple is also unchanged and rolled forward by a quarter. A holding company discount of 10% is applied, similar to Escorts. However, there's a 20% discount compared to peers Maruti Suzuki (MSIL) and Ashok Leyland (AL) due to concerns about automotive market share loss. The target price has slightly decreased due to earnings estimate cuts offsetting the roll-forward of the valuation. <cmsannotation type="cmsannotation" annotationid="Bajaj Auto" comment="Subhead" text="Bajaj Auto">Bajaj Auto</cmsannotation> For Bajaj Auto, the recommendation is "HOLD" with a target price of ₹4,900 (current price: ₹4,600). The valuation is based on a sum-of-the-parts (SoTP) approach using a 16x target multiple for Bajaj Auto's internal combustion engine (ICE) business in September 2025. The Electric Vehicle (EV) business is valued at 2.3x the estimated EV revenue for the same period. The target multiple for EV aligns with global EV companies' market cap/revenue multiples for December 2025. The target price has risen due to higher earnings estimates and a valuation base shift. Additionally, the value of Bajaj's stake in Pierer Bajaj AG, with holdings in PIERER Mobility AG, is included in the assessment. <cmsannotation type="cmsannotation" annotationid="Tata Motors" comment="Subhead" text="Tata Motors">Tata Motors</cmsannotation> Tata Motors gets a "BUY" recommendation with a target price of 770, mirroring the current price. The valuation relies on a sum-of-the-parts (SoTP) method, averaging various valuation methods, such as EV/Sales, EV/EBITDA, EV/EBIT, and P/E ratios. The multiples remain the same, but the valuation base is extended by a quarter. Different valuation multiples are applied to segments like JLR, China JV, Passenger Vehicles (PV), and Commercial Vehicles (CV), considering their estimated sales, EBITDA, EBIT, and EPS for September 2025. These multiples are benchmarked against similar companies, with target multiples discounted by 20% for JLR and China JV, and 50% for CV and PV. The Electric Vehicle (EV) business valuation is based on the last funding round average with a 30% discount, and the target price remains unchanged.

PV sales to shift gears courtesy festive season but 2-wheelers’ struggles to continue

<ul><li>India’s largest car maker <keyword id="44883" type="General" weightage="20" keywordseo="maruti-suzuki" source="Orion">Maruti Suzuki</keyword> is looking towards sports utility vehicles (SUV) and electric cars for its next phase of growth. </li><li>The company’s chairman RC Bharghava said shifting consumer preferences and increasing prices of entry-level cars like the Alto K10 are driving people away from these cars. </li><li>While the company expects small cars to remain flat in FY24, it expects utility vehicles to continue to lead growth. </li></ul>India’s largest car maker Maruti Suzuki is looking towards sports utility vehicles (SUV) and electric cars for its next phase of growth as shifting consumer preferences and increasing prices of small cars like the Alto K10 are driving people away from them. The car maker’s shares were trading flat on Thursday morning even as brokerages underlined that margins are expected to recover and demand is expected to be stable going forward. Maruti Suzuki<a href="https://www.businessinsider.in/business/auto/news/maruti-suzuki-q4-net-profit-zooms-43-to-2624-crore-beating-expectations-to-add-capacity-of-1-million-vehicles/articleshow/99790060.cms"> reported</a> a 43% YoY rise in its standalone net profit to ₹2,624 crore in Q4. It is also the first auto company to cross the ₹1 lakh crore turnover mark in a financial year. Overall, its FY23 revenue grew 33% to ₹1.18 lakh crore while total domestic volumes increased 20.7%, led by utility vehicles and compact cars. Maruti Suzuki’s shares have gained 2.9% in the last one month, and a meager 1.37% in 2023 so far, underperforming the broader Nifty Auto index which gained nearly 8% and 2%, respectively. Still, post the Q4 performance and forward-looking commentary, an average of brokerage estimates suggests that there is an upside of nearly 22% in the next 12 months, with the average target price being ₹10,355 while the current market price is ₹8,518. <cmsannotation type="cmsannotation" annotationid="Small cars in the slow lane" comment="subhead" text="Small cars in the slow lane">Small cars in the slow lane</cmsannotation> On the other hand, entry-level cars like Alto K10 and S-Presso, which accounted for 14% of the company’s total sales in FY23, grew just 10% during the year. This is an industry-wide trend and not just limited to Maruti Suzuki. Data from SIAM highlighted that while utility vehicles have grown at a rapid pace of nearly 35% in FY23 crossing the 2 million mark during the year, small cars grew at a much slower pace of about 10% in this period. The outlook for the small car segment looks worse for FY24. Maruti Suzuki’s chairman RC Bharghava said in a post-earnings call with analysts that the growth in small cars is expected to remain flat, but added that he’s “not losing sleep over it”. There are two reasons for this, according to Bharghava – a decisive shift in consumer buying preferences, which is reflected in the growth in the utility vehicles segment. The other reason is affordability – small cars have gotten expensive over the years due to reasons like inflation, new regulatory requirements adding costs, among others. For instance, the entry-level Alto K10 starts at ₹4.7 lakh and goes all the way up to ₹7 lakh (approximate on-road prices), making them out of the reach of many people in a country. The average annual salary in India was ₹3.88 lakh per annum in 2021, according to data from the Reserve Bank of India. Bharghava quipped that Indians will need to get richer for the small cars to grow further. His expectation of flat growth in small car sales in FY24 also points at a wider economic slowdown. <cmsannotation type="cmsannotation" annotationid="The next phase of growth – utility vehicles and electric cars" comment="subhead" text="The next phase of growth – utility vehicles and electric cars">The next phase of growth – utility vehicles and electric cars</cmsannotation> Despite this, Maruti Suzuki is setting itself up for the next phase of growth with the addition of 1 million annual manufacturing capacity and a capital expenditure of ₹8,000 crore, which is 27% higher than the capex spends of FY23. Powering the next phase of growth will be utility vehicles and electric cars – Bharghava said that Maruti will launch multiple new utility vehicles in the current financial year as it looks to expand its portfolio to counter the challenge by rivals like Tata Motors and M&amp;M. Utility vehicles accounted for 21% of Maruti Suzuki’s total domestic volumes in FY23, and 24% in Q4. In addition to this, the car maker has announced plans to launch six new electric vehicles by 2030. The company had shown off a concept version in February this year, but the first production model is expected to roll out only in 2025. Maruti Suzuki expects the share of electric vehicles – both pure and hybrid – to go up to 40% by 2030. <cmsannotation type="cmsannotation" annotationid="Analysts expect margin improvements going forward" comment="subhead" text="Analysts expect margin improvements going forward">Analysts expect margin improvements going forward</cmsannotation> A combination of a richer product mix due to faster growth of utility vehicles, cooling commodity prices, cost control and smaller discounts are expected to help Maruti Suzuki post margin improvements. “We believe going forward, strong demand, improving supplies, moderating commodity inflation and moderate discounts will help EBITDA margins to recover to 11.2% in FY24E, versus 9.4% in FY23,” said the analysts at Yes Securities. Analysts at Motilal Oswal echoed similar sentiments while expressing their bullish outlook on the stock, adding that improving supplies thanks to easing semiconductor constraints will aid Maruti Suzuki’s margins. “After two consecutive years of market share loss, we believe that Maruti Suzuki is at the cusp of market share recovery led by new launches. Healthy order book and operating leverage tailwinds will further support strong performance going ahead,” the analysts at JM Financial said. Overall, both analysts and the company itself expect Maruti Suzuki to outperform the industry in FY24, which is expected to register a volume growth of 5-7%. A strong order book of 4.12 lakh units or about 25% of Maruti Suzuki’s FY23 volumes also adds to the confidence. SEE ALSO: <a href="https://www.businessinsider.in/business/auto/news/maruti-suzuki-q4-net-profit-zooms-43-to-2624-crore-beating-expectations-to-add-capacity-of-1-million-vehicles/articleshow/99790060.cms">Maruti Suzuki Q4 net profit zooms 43% to ₹2,624 crore beating expectations, to add capacity of 1 million vehicles</a> <a href="https://www.businessinsider.in/business/auto/news/bajaj-auto-rides-on-richer-product-mix-in-q4-but-export-and-disruption-concerns-persist/articleshow/99784940.cms">Bajaj Auto rides on richer product mix in Q4, but export and disruption concerns persist</a> <a href="https://www.businessinsider.in/finance/banks/news/indusind-bank-likely-candidate-for-rerating-after-q4-profit-surge-of-46/articleshow/99756150.cms">IndusInd Bank likely candidate for rerating after Q4 profit surge of 46%</a>

Maruti Suzuki to drive into the SUV lane as small cars become dearer

Maruti Suzuki net profit zooms 2x even as high commodity prices stress margins

<ul><li><keyword id="100743" type="General" weightage="50" keywordseo="suzuki-motor-corporation" source="Orion">Suzuki Motor Corporation</keyword> on Monday said it expects its automobile sales in <keyword id="3658" type="General" weightage="50" keywordseo="india" source="Orion">India</keyword> to be higher than the 5-7 per cent annual growth projected for the domestic market this fiscal.</li><li>In a statement, <keyword id="6911" type="General" weightage="100" keywordseo="suzuki" source="Orion">Suzuki</keyword> stated that it aims to recover its market share in India by introducing sports utility vehicles.</li><li>The Japanese automaker said its operating profit increased by 159.1 billion yen year on year (83.1 per cent) to 350.6 billion in FY 2022.</li></ul>Suzuki Motor Corporation on Monday said it expects its automobile sales in India to be higher than the 5-7 per cent annual growth projected for the domestic market this fiscal. The Japanese automaker, which has a 56.4 per cent stake in the country's leading carmaker <keyword id="6365618" type="DOMAIN" weightage="100" keywordseo="maruti-suzuki-india" botkeyword="" source="ET" sourcekeytype="COMPANY" meta.keywordsubtype="EQ" meta.aliasname="maruti suzuki india" meta.entityname="Maruti Suzuki India Ltd." meta.entityid="11890" meta.seoname="maruti-suzuki-india-ltd">Maruti Suzuki India</keyword>, on Monday reported a consolidated 30.1 per cent year-on-year increase in net sales at 4,641.6 billion yen for FY 2022 (April 2022- March 2023). In a statement, Suzuki stated that it aims to recover its market share in India by introducing sports utility vehicles. It also noted that the automaker will focus on multiple technological pathways like CNG and hybrid cars and not solely depend on battery electric cars to contribute to carbon neutrality in the Indian market. "We want to contribute to carbon neutrality through a 'multi-path' that includes CNG vehicles, HEVs, etc., rather than focusing solely on BEVs," Suzuki Motor Corp said in a statement referring to the Indian market. The Japanese automaker said its operating profit increased by 159.1 billion yen year on year (83.1 per cent) to 350.6 billion in FY 2022. Suzuki stated that consolidated net sales and profits increased in the last year, mainly owing to the impact of the exchange rates and an increase in volume in markets like India, <keyword id="6355311" type="General" weightage="20" keywordseo="japan" source="Orion">Japan</keyword> and <keyword id="12925" type="General" weightage="50" keywordseo="africa" source="Orion">Africa</keyword>. On a consolidated basis, the profit attributable to owners of the parent increased by 60.8 billion yen (37.9 per cent) to 221.1 billion yen, the automaker stated. In the current fiscal year, the company expects net sales of 4.9 trillion yen, up 5.6 per cent from FY2022 mainly due to an increase in volume, Suzuki stated. Operating profit is expected to be 330 billion yen, down 5.9 per cent from FY2022, due to factors such as increased growth investment to realise the company's growth strategy, as well as the strong yen and increase in raw material prices, it added. For the 2022-23 fiscal, <keyword id="13435058" type="COMPANY" weightage="50" keywordseo="maruti-suzuki" source="Orion" meta.marketcap="280822.6861778" meta.tagname="Maruti Suzuki India Ltd" meta.tagpopularcount="0" meta.sectorid="505" meta.entitytype="company" meta.aum="0" meta.matchtype="exact" meta.entityid="11890" meta.tagseoname="maruti-suzuki-india-ltd" meta.sector="Auto" meta.tagnameorg="Maruti Suzuki India Ltd.">Maruti Suzuki</keyword> India posted a consolidated net profit of Rs 8,211 crore against Rs 3,879 crore in 2021-22. Net sales last fiscal year stood at Rs 1,17,571 crore against Rs 88,330 crore in 2021-22. The company sold a total of 19,66,164 vehicles last fiscal, despite missing production of about 1,70,000 units due to a shortage of electronic components. This translated to a growth of 19 per cent over FY22 sales volume of 16,52,653 vehicles. SEE ALSO: <a href="https://www.businessinsider.in/tech/apps/news/is-whatsapp-secretly-listening-to-your-private-conversations-heres-how-to-check/articleshow/100155980.cms">Is WhatsApp secretly listening to your private conversations? Here’s how to check</a> <a href="https://www.businessinsider.in/tech/news/google-pixel-6a-vs-pixel-7a-smartphone-comparison-with-price-and-features/articleshow/100177889.cms">Google Pixel 6a vs Pixel 7a: Is Google's latest mid-ranger worth the extra ₹12,000?</a>

Expect India sales to be higher than industry growth this fiscal: Suzuki Motor

<keyword id="44883" type="General" weightage="100" keywordseo="maruti-suzuki" source="Orion">Maruti Suzuki</keyword> <keyword id="3658" type="General" weightage="50" keywordseo="india" source="Orion">India</keyword> on Friday said it has increased prices of its premium compact model <keyword id="101015" type="General" weightage="80" keywordseo="ignis" source="Orion">Ignis</keyword> by up to Rs 27,000 (ex-showroom Delhi) with the addition of new features. The model is now being equipped with electronic stability programme (ESP) and <keyword id="16627859" type="General" weightage="80" keywordseo="hill-hold-assist" source="Orion">Hill Hold Assist</keyword> as standard feature across all the variants providing an added safety shield for customers, the country's largest carmaker said in a regulatory filing. The Ignis is also compliant with the upcoming E20 and Real Driving Emission (RDE) norms, it added. "The price change varies across trims and ranges up to Rs 27,000 (ex-showroom - Delhi)," Maruti Suzuki India said. The new prices are effective with immediate effect, it added. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/air-india-to-hire-5100-cabin-crew-pilots-in-2023/articleshow/98210243.cms">Air India to hire 5,100 cabin crew, pilots in 2023</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/spicejet-net-profit-jumps-to-107-crore-in-q3-fy2023/articleshow/98208227.cms">SpiceJet net profit jumps to ₹107 crore in Q3 FY2023</a>

Maruti Suzuki hikes Ignis price by up to ₹27k

Automobile major <keyword id="44883" type="General" weightage="20" keywordseo="maruti-suzuki" source="Orion">Maruti Suzuki</keyword> India's Q2FY22 net profit declined by over 65 per cent on a year-on-year basis. Net profit fell to Rs 475.3 crore during the quarter under review from Rs 1,371.6 crore in Q2FY21. However, the company's net sales for the quarter under review rose to Rs 19,297.8 crore from Rs 17,689.3 crore earned in Q2FY21. "The company sold a total of 379,541 units during the quarter constrained by a global shortage in the supply of electronic components," the auto major said in a statement. "Sales in the domestic market stood at 320,133 units. Exports were at 59,408 units, the highest ever in any quarter." During the same period of the previous year, the company had clocked a total sale of 393,130 units including 370,619 units in domestic market and 22,511 units in the export market. "An estimated 116,000 vehicles could not be produced owing to the electronics component shortage mostly corresponding to the domestic models." "The company had more than 200,000 pending customer orders at the end of the quarter for which the company is making all efforts to expedite deliveries." According to the auto major, the quarter was also marked by an unprecedented increase in the prices of commodities like steel, aluminium, and precious metals within a span of one year. "The company made maximum efforts to absorb input cost increases off setting them through cost reduction and passed on minimum impact to customers by way of car price increase." SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/softbank-will-be-selling-20-of-its-stake-in-policybazaars-ipo-next-week/articleshow/87310755.cms">SoftBank will be selling 20% of its stake in PolicyBazaar’s IPO next week</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/policybazaar-sigachi-industries-and-sjs-enterprises-upcoming-new-ipos-in-november-2021/articleshow/87310035.cms">IPOs worth around ₹7,000 crore to open in November first week</a>

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