Hyundai Motor India Ltd Valuation Shifts Amid Strong Market Performance

Valuation Metrics: From Attractive to Fair

Recent data indicates Hyundai Motor India’s price-to-earnings (P/E) ratio stands at 32.34, a level that has nudged its valuation grade from attractive to fair. This marks a significant increase compared to earlier periods when the stock traded at more compelling multiples. The price-to-book value (P/BV) ratio has also escalated to 10.67, underscoring a premium valuation relative to the company’s net asset base. These valuation multiples now position Hyundai Motor India somewhat above the average for its automobile sector peers, signalling a shift in market sentiment.

For context, Maruti Suzuki, a key competitor, holds a comparable P/E of 31.64 but trades at a higher EV/EBITDA multiple of 23.22, suggesting Hyundai’s valuation remains competitive on an enterprise value basis. Meanwhile, Mahindra & Mahindra and Tata Motors Passenger Vehicles maintain more attractive valuations, with P/E ratios of 26.66 and 22.5 respectively, and notably lower EV/EBITDA multiples, reflecting differing growth expectations and risk profiles within the sector.

Strong Operational Performance Supports Valuation

Despite the valuation adjustment, Hyundai Motor India’s operational metrics remain impressive. The company boasts a return on capital employed (ROCE) of 59.51% and a return on equity (ROE) of 32.56%, both indicative of efficient capital utilisation and strong profitability. These figures are well above industry averages, reinforcing the company’s competitive positioning in the Indian automobile market.

Additionally, the enterprise value to EBIT ratio stands at 25.83, while the EV to sales ratio is 2.60, reflecting solid earnings generation relative to the company’s market valuation. Dividend yield remains modest at 0.91%, consistent with the company’s reinvestment strategy to fuel growth and innovation.

Market Performance and Price Movements

Hyundai Motor India’s stock price has demonstrated resilience and momentum, closing at ₹2,304.50 on 23 Feb 2026, up 5.73% on the day. The stock has traded within a 52-week range of ₹1,542.95 to ₹2,889.65, reflecting significant appreciation over the past year. Year-to-date returns are positive at 0.25%, outperforming the Sensex which has declined by 2.82% over the same period. Over the last year, the stock has delivered a robust 24.21% return, substantially outpacing the Sensex’s 9.35% gain.

Intraday volatility was evident with a high of ₹2,367.85 and a low of ₹2,161.40, suggesting active trading interest and investor confidence in the company’s prospects despite broader market uncertainties.

Comparative Valuation: Hyundai vs Peers

When benchmarked against its peers, Hyundai Motor India’s valuation appears fair but less compelling than some competitors. Maruti Suzuki’s P/E ratio of 31.64 is slightly lower, but its EV/EBITDA multiple of 23.22 is higher, indicating a premium on earnings before interest, taxes, depreciation, and amortisation. Mahindra & Mahindra and Tata Motors Passenger Vehicles offer more attractive valuations with P/E ratios of 26.66 and 22.5 respectively, and significantly lower EV/EBITDA multiples of 14.6 and 6.52, suggesting these companies may offer better value for investors seeking lower multiples.

Hyundai’s PEG ratio remains at 0.00, which may reflect either a lack of consensus on growth projections or a data anomaly, but the company’s strong ROCE and ROE metrics support a premium valuation to some extent. Investors should weigh these factors carefully when considering relative value within the automobile sector.

Investment Grade Upgrade and Market Sentiment

MarketsMOJO has upgraded Hyundai Motor India’s Mojo Grade from Hold to Buy as of 8 Dec 2025, reflecting improved confidence in the company’s growth trajectory and financial health. The Mojo Score of 70.0 underscores a positive outlook, supported by strong fundamentals and market positioning. However, the valuation grade has shifted from attractive to fair, signalling that while the stock remains a buy, investors should be mindful of the premium currently priced in.

This upgrade aligns with the company’s consistent delivery of operational excellence and market share gains, but also acknowledges the need for caution given the elevated multiples relative to historical averages and some peers.

Outlook and Investor Considerations

Hyundai Motor India’s valuation shift to a fair grade suggests that the stock is no longer a bargain but remains a solid investment backed by strong returns on capital and consistent market performance. Investors should consider the company’s premium multiples in the context of its growth prospects, competitive advantages, and sector dynamics.

While the automobile sector faces challenges such as raw material cost inflation and regulatory changes, Hyundai’s robust operational metrics and market share gains provide a cushion against volatility. The stock’s recent outperformance relative to the Sensex further highlights its resilience.

For long-term investors, the current valuation implies moderate upside potential, with the possibility of further gains contingent on sustained earnings growth and market conditions. Those seeking value may find more attractive entry points in peers like Tata Motors Passenger Vehicles or Mahindra & Mahindra, which trade at lower multiples but with differing risk profiles.

In summary, Hyundai Motor India Ltd remains a buy-rated stock with a fair valuation, reflecting a balance between strong fundamentals and a premium price. Investors should monitor valuation trends closely and consider broader market factors when making allocation decisions.

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