Automobile Sector Stocks – Maruti Suzuki vs. Hyundai Motors India

Company Overview of Maruti Suzuki India Ltd

Maruti Suzuki India Limited is involved in the manufacturing, purchasing and selling of motor vehicles, components and spare parts. The company focuses on producing and selling both passenger and commercial vehicles. It also offers aftermarket parts and accessories under the brand names Maruti Suzuki Genuine Parts and Maruti Suzuki Genuine Accessories. 

In addition, the company facilitates the sale of pre-owned cars, provides fleet management services and offers car financing. Maruti Suzuki’s vehicles are sold through three channels: NEXA, Arena and Commercial.  

Company Overview of Hyundai Motors India

Hyundai Motors India Limited (HMIL), a subsidiary of the South Korean automotive giant Hyundai Motor Company, is one of India’s leading car manufacturers. Established in 1996, it has revolutionized the Indian automobile market with innovative designs, advanced technology and a focus on customer satisfaction. 

With a diverse portfolio of vehicles ranging from hatchbacks to SUVs, Hyundai caters to various market segments. The company’s state-of-the-art manufacturing facility in Chennai emphasizes high-quality production and exports vehicles to over 90 countries. Hyundai is also committed to sustainability, with a focus on electric and eco-friendly vehicle solutions to shape the future of mobility in India. 

The Stock Performance of Maruti Suzuki India Limited

The table below displays the month-by-month stock performance of Maruti Suzuki India Ltd for the past year.

The Stock Performance of Hyundai Motors India

The table below displays the month-by-month stock performance of Hyundai Motor India Ltd for the past year.

Fundamental Analysis of Maruti Suzuki

Maruti Suzuki India Ltd is a leading automotive manufacturer in India, established in 1981. A 

subsidiary of the Suzuki Motor Corporation, it has become synonymous with affordable and reliable vehicles. With a diverse range of cars that cater to various segments, Maruti Suzuki has consistently held a significant market share in the Indian automotive sector.   

Hyundai Motors India’s stock is valued at ₹12,092.30, with a market cap of ₹3,80,185.02 crore. It has a 1-year return of 18.74%, a 5-year CAGR of 10.13% and an average profit margin of 6.7%, reflecting stable profitability.

• Close Price ( ₹ ): 12092.30
• Market Cap ( Cr ): 380185.02
• Dividend Yield %: 1.03
• Book Value (₹): 85636.00
• 1Y Return %: 18.74
• 6M Return %: -4.33
• 1M Return %: 5.98
• 5Y CAGR %: 10.13
• % Away From 52W High: 13.13
• 5Y Avg Net Profit Margin %: 6.70

Fundamental Analysis of Hyundai Motors India

Hyundai, founded in 1967 in South Korea, has grown into a leading global automotive manufacturer. Known for its commitment to innovation and quality, Hyundai produces a diverse range of vehicles, from compact cars to SUVs and electric vehicles. The company emphasizes sustainable development and has made significant strides in eco-friendly technologies, aiming to reduce its carbon footprint and enhance fuel efficiency.  

With a stock price of ₹1,817.10 and a market cap of ₹1,47,646.84 crore, the company offers an attractive 7.30% dividend yield. It shows steady near-term performance with minimal 1-year and 6-month returns and is 8.41% below its 52-week high.

• Close Price ( ₹ ): 1817.10
• Market Cap ( Cr ): 147646.84
• Dividend Yield %: 7.30
• Book Value (₹): 10665.66
• 1Y Return %: -0.14
• 6M Return %: -0.14
• 1M Return %: 0.87 
• % Away From 52W High: 8.41 

Financial Comparison of Maruti Suzuki India Ltd and Hyundai Motors India

The table below shows a financial comparison of Maruti Suzuki India Ltd and Hyundai Motor India Ltd.

Points to be noted:

• (TTM) Trailing 12 Months – Trailing 12 months (TTM) is used to describe the past 12 consecutive months of a company’s performance data when reporting financial figures.
• EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization): Measures a company’s profitability before accounting for financial and non-cash expenses.
• PBIT (Profit Before Interest and Tax): Reflects operating profit by excluding interest and taxes from total revenue.
• PBT (Profit Before Tax): Indicates profit after deducting operating costs and interest but before taxes.
• Net Income: Represents the company’s total profit after all expenses, including taxes and interest, are deducted.
• EPS (Earnings Per Share): Shows the portion of a company’s profit allocated to each outstanding share of stock.
• DPS (Dividend Per Share): Reflects the total dividend paid out per share over a specific period.
• Payout Ratio: Measures the proportion of earnings distributed as dividends to shareholders.

Dividend of Maruti Suzuki and Hyundai Motors India

The table below illustrates the dividends distributed by Maruti Suzuki company, while Hyundai Motors has yet to issue dividends.

Advantages and Disadvantages of Investing in Maruti Suzuki India Ltd

Maruti Suzuki India Ltd

The primary advantage of Maruti Suzuki India Ltd lies in its dominant market share in the Indian automobile sector, supported by its extensive distribution network, cost-effective manufacturing and a strong lineup of fuel-efficient vehicles.

1. Market Leadership: Maruti Suzuki enjoys unparalleled market leadership in India, capturing over 40% of the market share. Its diverse portfolio of compact and budget-friendly cars makes it a preferred choice for Indian consumers.
2. Extensive Dealer Network: The company benefits from an extensive dealership and service network across urban and rural areas, ensuring easy access to sales and after-sales services, thus enhancing customer satisfaction and loyalty.
3. Strong R&D Focus: Maruti Suzuki’s investments in research and development have allowed it to introduce fuel-efficient, technologically advanced and eco-friendly vehicles, aligning with government initiatives and evolving consumer preferences.
4. Cost-Effective Operations: Leveraging economies of scale and efficient production processes, Maruti Suzuki maintains competitive pricing, ensuring affordability without compromising on quality, which significantly boosts its mass appeal.
5. Robust Export Performance: The company has expanded its footprint in international markets by exporting vehicles to over 100 countries, diversifying its revenue streams and reducing dependency on the domestic market.

The main disadvantage of Maruti Suzuki India Ltd is its over-reliance on the Indian market, making it vulnerable to domestic economic fluctuations and regulatory changes, which could adversely impact its sales and overall profitability.

1. Limited Portfolio Diversity: While strong in small and mid-sized cars, the company lacks a significant presence in the premium and electric vehicle segments, reducing its ability to compete with global and domestic competitors in these growing markets.
2. Intense Competition: The automobile industry faces fierce competition from both established global players and new entrants, pressuring Maruti Suzuki to innovate continually while maintaining cost efficiency to retain its market position.
3. Dependence on Petrol and Diesel Models: A significant portion of Maruti’s sales comes from petrol and diesel vehicles. This dependence poses a risk amidst the global shift toward electric mobility and stricter emissions regulations.
4. Limited Global Market Share: Despite its dominance in India, Maruti Suzuki’s global market share remains relatively small, which restricts its ability to leverage international growth opportunities effectively.
5. Rising Input Costs: Increasing raw material prices and supply chain disruptions, including semiconductor shortages, have raised production costs, potentially impacting profitability and pricing competitiveness in both domestic and export markets.

Advantages and Disadvantages of Investing in Hyundai Motors India

Hyundai Motor India Ltd

The primary advantage of Hyundai Motor India Ltd lies in its diversified product portfolio, catering to various customer segments, from affordable hatchbacks to premium SUVs, ensuring consistent demand and broadening its appeal across different markets.

1. Strong Brand Recognition: Hyundai is a globally recognized brand with a significant presence in India, supported by its reputation for reliability, innovation and after-sales service, which attracts a diverse customer base.
2. Wide Dealer Network: Hyundai boasts an extensive and well-established dealer and service network across India, ensuring accessibility and convenience for customers, which strengthens customer loyalty and enhances overall satisfaction.
3. Advanced Technology and Design: The company focuses on integrating cutting-edge technology and appealing designs into its vehicles, attracting tech-savvy and style-conscious buyers while staying ahead of its competitors.
4. Diverse Engine Offerings: Hyundai provides a range of petrol, diesel and electric engine options, catering to the evolving preferences of consumers and aligning with the growing demand for environmentally friendly mobility solutions.
5. Export-Oriented Growth: Hyundai Motor India is a major contributor to the parent company’s export volumes, leveraging India as a production hub to cater to international markets, which enhances its revenue diversification.

The main disadvantage of Hyundai Motor India Ltd stems from its high dependency on the small car segment, which makes the company vulnerable to fluctuations in demand within this category and shifts in consumer preferences.

1. Limited Premium Market Share: Hyundai faces challenges in penetrating the premium and luxury car segments in India, where established competitors dominate, limiting its presence in higher-margin vehicle categories.
2. Intense Competition: The Indian automotive market is highly competitive, with numerous domestic and international players offering similar products, which can pressure Hyundai’s pricing and margins.
3. Rising Input Costs: Increasing costs of raw materials and components can impact Hyundai’s profitability, especially in a price-sensitive market like India.
4. Dependence on Petrol and Diesel Cars: Despite its focus on electric vehicles, a significant portion of Hyundai’s sales still rely on petrol and diesel engines, which may face regulatory and consumer demand challenges as EV adoption grows.
5. Supply Chain Disruptions: Global supply chain issues, including semiconductor shortages, can disrupt production schedules and delay deliveries, negatively affecting Hyundai’s operational efficiency and customer satisfaction.

How to Invest in Maruti Suzuki and Hyundai Motors India Stocks?

Investing in Maruti Suzuki and Hyundai Motors India stocks requires thorough research, understanding market trends and choosing the right platform. Here are the steps:

1. Open a Demat Account: Begin by opening a Demat and trading account with a trusted stockbroker such as Alice Blue. Their platform provides seamless access to research tools and market insights for informed decisions.
2. Analyze Market Trends: Study financial reports, past performance and growth potential of Maruti Suzuki and Hyundai Motors India. Pay attention to industry trends and consumer demand influencing the automobile sector.
3. Diversify Your Portfolio: Allocate investments wisely between Maruti Suzuki and Hyundai Motors India stocks to minimize risks. Diversification helps balance growth potential and reduce the impact of sector-specific downturns.
4. Monitor Regularly: Keep an eye on market developments, policy changes and global trends that affect the automobile sector. Regular monitoring ensures timely decision-making for buying or selling.
5. Leverage Stockbroker Tools: Utilize the research reports, charts and trading tools provided by stockbrokers like Alice Blue. These resources assist in identifying the right entry and exit points for investments.

Maruti Suzuki vs. Hyundai Motors India – Conclusion

Maruti Suzuki, India’s leading automobile manufacturer, stands out for its extensive domestic market presence, strong distribution network and cost-effective production. With a focus on affordable and fuel-efficient vehicles, it appeals to a wide customer base and continues to dominate the passenger car segment in India.  

Hyundai Motors India leverages its global expertise to deliver stylish, feature-rich and technologically advanced vehicles. Its diverse product portfolio and focus on sustainability through electric and hybrid vehicles position it as a strong competitor, offering innovation and value to Indian consumers while tapping into emerging automotive trends.

Automobile Sector Stocks – Maruti Suzuki vs. Hyundai Motors India – FAQ

Disclaimer: The above article is written for educational purposes and the companies’ data mentioned in the article may change with respect to time The securities quoted are exemplary and are not recommendatory.