Hyundai Motor India’s valuation premium against South Korean parent shrinks on currency weakness

Hyundai Motor India Ltd., India’s largest IPO till date, has seen a decline in its valuation premium compared to its South Korean parent owing to the South Korean Won outperforming against the Indian rupee.

The Indian entity’s valuation premium against the parent has declined to 506% from 571% about three weeks earlier.

As of Thursday’s closing, Hyundai Motors India traded at 23 times one-year forward earnings, compared to 3.8 times for its parent company. The India unit shed 7% on Thursday, ending with a market capitalisation of $15.9 billion, and also turning negative for the year.

The India entity, which once formed 60% of Hyundai Motor Company’s overall market capitalisation, now forms only 55% of the same due to the weakness in the currency.
Won, the South Korean currency, is now the best performer in Asia after the Japanese Yen, has gained 2.5% against the US Dollar so far this year, compared to the Indian rupee’s depreciation of 2% against the greenback.

Shares of both Hyundai Motor India and its subsidiary have experienced a decline of 5% so far this year in local currency terms.

Hyundai Motor India reported a 19% year-on-year decline in its December quarter earnings to ₹1,161 crore. Revenue for the quarter stood at ₹16,648 crore, down 1.3% from the previous year. The results fell short of analysts’ expectations due to higher price discounts, increased staff costs, and weaker-than-expected exports driven by a shift in geographical mix. Additionally, the company anticipates a subdued domestic volume environment to persist through most of 2025.

However, JP Morgan, which has an “overweight” rating on the stock believes that the underlying trends should improve in the second half of financial year 2026. “We cut our financial year 2025-2027 Earnings Per Share estimates by 1%-4% to factor in the Q3 miss and revise our price target to ₹2,140,” wrote JP Morgan in an investor note.

While 84% of the 19 analysts tracking Hyundai Motor India have a “Buy” rating on the stock, two recommend a “Sell,” and one suggests a “Hold.” In comparison, the parent company enjoys a 100% “Buy” recommendation from analysts.

Shares of Hyundai Motor India ended 5.7% lower on Thursday at ₹1,722. The stock is down 12% from its IPO price of ₹1,960.