On March 27, domestic brokerage firm Asit C Mehta Financial Services initiated coverage on the automobile major with a Hold call and a target price of Rs 1,985, forecasting a mere 5% upside from current market levels. Analysts suggest that risks remain, primarily around continued market share erosion, weaker traction in the domestic market compared to peers, and limited diversification across the fuel mix. The decline in market share has persisted despite tailwinds from GST 2.0, falling from 16.1% in FY19 to 12.6% in 9MFY26.
Here are five risk factors highlighted by the brokerage
Competition gets feisty – Hyundai Motor India faces intensifying competition, particularly in the high-growth SUV and EV segments. Rivals such as Tata Motors, Mahindra & Mahindra and Maruti Suzuki, along with newer entrants like MG Motor and Kia India, have strengthened their presence in these categories. With consumer preference shifting toward SUVs, EVs and feature-rich vehicles, Hyundai risks losing ground if its product pipeline and positioning do not keep pace.
SUV overdependence –
The company also remains heavily dependent on a limited set of SUV models, particularly Creta, Venue and Exter, which account for a significant share of its volumes and profitability. Any decline in demand, rising competition or delays in product refresh cycles for these key models could disproportionately impact overall sales, pricing power and margins.
Premiumisation can come biting back –
Hyundai’s premiumisation strategy poses another risk during demand slowdowns. The company has focused on higher-end features such as panoramic sunroofs, large infotainment systems and ADAS to drive average selling prices. While this supports margins in a strong market, it also increases price sensitivity, making the company vulnerable to downtrading if consumer sentiment weakens due to high interest rates or inflation. In such a scenario, Hyundai may lose share faster than peers with stronger entry-level offerings.
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Too late to enter EV base –
In the EV space, Hyundai’s relatively late push in India could be a disadvantage. Despite its global strength, its domestic EV portfolio remains limited compared to Tata Motors and Mahindra & Mahindra, which have already built scale and brand recall. A faster-than-expected shift toward EV adoption could therefore pose challenges.
Middle East war –
Risks stemming from the ongoing West Asia crisis remain elevated, with the conflict between the US-Israel alliance and Iran disrupting the availability of key energy supplies such as crude oil, LNG and LPG, particularly due to the closure of the Strait of Hormuz. With critical oil and gas infrastructure being targeted, the risk of prolonged disruption persists. The resulting uncertainty around energy availability and pricing, along with rising freight costs due to container shortages and potential damage to regional infrastructure, could have wide-ranging implications across sectors. The auto industry, in particular, remains vulnerable as demand is closely tied to overall economic conditions, while supply chain disruptions and higher input costs may exert pressure on pricing and margins.
Hyundai Motor India has delivered a 12% CAGR in export volumes over the past five years and has guided for exports to account for 30% of total production by FY30E, up from around 21% currently.
In line with this, export volumes are expected to grow at a CAGR of 9.5% over FY26E–FY28E, outpacing domestic volume growth of 7.7% during the same period, thereby steadily increasing the share of exports in overall volumes, the brokerage added.
Hyundai Motor share price is down 35% from their record high of Rs 2,890 per share it clinched in September 2025.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)