Published: 11th Oct 2024
By: Value Research
Hyundai Motor is India’s second-largest car maker by passenger vehicle (PV) sales. Its South Korean parent Hyundai Motor Corp is selling up to 17.5% stake in the company through the IPO, which is entirely an offer-for-sale. The IPO is the biggest India has ever seen, and the largest in Asia this year.
Total IPO size (Rs cr) 27870 Offer for sale (Rs cr) 27870 Fresh issue (Rs cr) - Price band (Rs) 1,865 -1,960 Subscription dates October 15-17, 2024 Purpose of issue Offer for sale
159258 Net worth (Rs cr) 12149 Promoter holding (%) 82.5 Price/earnings ratio (P/E) 25.6 Price/book ratio (P/B) 13.1M-cap (Rs cr)
2Y CAGR (%) TTM FY24 FY23 FY22 Revenue (Rs cr) 21.4 70550 69829 60308 47378 EBIT (Rs cr) 44.5 7298 6925 5359 3317 PAT (Rs cr) 44.5 6221 6060 4709 2902 Net worth (Rs cr) -20.5 12149 10666 20055 16856 Total debt -15.9 821 833 1189 1178Key financials
EBIT is earnings before interest and taxes PAT is profit after tax TTM is 12 months ending June 2024
3Y average (%) TTM FY24 FY23 FY22 ROE (%) 27.4 37.1 39.5 25.5 17.2 ROCE (%) 29.3 40.9 42.3 27.3 18.4 EBIT margin (%) 8.6 10.3 9.9 8.9 7 Debt-to-equity 0.1 0.1 0.1 0.1Key ratios
ROE is return on equity ROCE is return on capital employed
The company had an industry-leading average EBIT margin of nearly 9% during FY22-24, given its strong operational efficiency, which is a result of local sourcing of raw materials from near its Chennai plant.
Hyundai’s focus on premium vehicles is a key growth strategy. Recognising the changing consumer preference towards higher-end models, it earned 49% of FY24 revenue from cars priced over Rs 10 lakh and around 20% from those above Rs 15 lakh. SUVs’ share in its revenue has shot up to 67% so far in 2024, up from 52% in March 2022.
Hyundai India’s market share in passenger cars (15%) is being eaten into by rivals like Tata Motors and M&M. Its royalty fee obligation to its parent is another big risk to profitability. To read how these factors are a threat to the auto giant, head on to our story from the link below: