publive-image

A detailed comparison of Maruti Suzuki and Hyundai Motor India's financial performance ahead of their IPOs

The Indian automotive industry is on the brink of a significant change with Hyundai Motor India Ltd (HMIL) preparing to launch its initial public offering (IPO). This IPO is poised to be the largest in India's automotive sector, targeting to raise ₹27,870 crore. Hyundai's entry into the stock market comes after Maruti Suzuki's listing in 2003, marking a notable moment in the history of Indian car manufacturers. Lets delve into the financial performance of both companies, focusing on their metrics leading up to their respective IPOs.

Market Valuation

The market valuation of Maruti Suzuki is a big value for an Indian entity since it is a large-cap company in the automotive sector. Its market valuation surpasses ₹4 lakh crore at present. The stock in its name trades on the National Stock Exchange (NSE) at ₹12,943.30.

While Hyundai Motor India, post its IPO, is likely to increase its market valuation to about ₹1.6 lakh crore, thus achieving a rather dramatic turnaround from the status quo. Such dramatic contrast tells it all that it is a battle between these two auto giants in the "Maruti Vs Hyundai" showdown.

The Hyundai IPO is going to disrupt the market dynamics, which is therefore a potential threat to the giant, Maruti Suzuki. Due to its high market capitalization, Maruti Suzuki is currently driving the sector, but once Hyundai enters the stock market arena, perception and investment pattern among stakeholders and analysts may alter.

Dividend Comparison

On the dividend front, Maruti Suzuki presently offers a yield of 0.97 percent. The recent payment to the shareholder and last dividend was paid at ₹125 per share on August 2, 2024. This steady return assures Maruti's corporation's focus on rewarding shareholders; one way that has contributed towards the esteemed position Maruti has assumed.

On the other hand, Hyundai Motor India has proven to be quite equal in its intention to pay back to its shareholders as well. It has released more than ₹10,000 crore in the fiscal year 2024. Hyundai had announced a special dividend of ₹13,270 per share, which has translated into a total payout of ₹10,782.42 crore for that particular period. This healthy distribution alone establishes that Hyundai is very financially robust and also gets it placed pretty well in the "Maruti Vs Hyundai" debate about the latter's financials.

Key Financials

Analyzing the core financial performance of the company would reveal an inverse nature of performances from the two companies. Maruti Suzuki reported a massive 47 per cent year-on-year growth in net profit for Q1 FY25, at ₹3,650 crore.

Revenue from operations for Q1 FY25 stood at ₹35,531.4 crore, which is an increase of 9.9 per cent from ₹32,326.7 crore from the same period in the previous fiscal. Earnings before interest, taxes, and depreciation at Maruti surged 49.1% to ₹4,448.3 crore. Operating margins expanded almost 350 basis points to 12.5%.

Hyundai Motor India, on the other hand, stated FY 2024, ended March with a net profit at ₹6,060 crores. This posting grew by 28.7 percent year-on-year. Revenue expanded at 15.8 percent to ₹69,829 crores. Although Hyundai has been great, pre-IPO financials at Maruti Suzuki are indicative of an aggressive growth trajectory compared to Maruti, which offers a competitive advantage that Maruti enjoys in the "Maruti Vs Hyundai" comparison.

Sales Performance

The sales performance analysis provides further insight into the pre-IPO positioning of the Automotive giants. Maruti Suzuki had a weak year-on-year growth for the cumulative sales figures during September at 2 percent selling 184,727 units. However, its domestic sales of passenger vehicles declined by 4 percent when it sold 144,962 units compared to 150,812 units during the same month last year. In contrast, exports registered a splendid growth of 23 percent for the month under consideration, exporting 27,728 units.

Hyundai Motor India did not have much of an easy time on the sales front during the same month as that of its competitor. The firm was reported to have seen a 10 percent decline in the total sales which comprised of 64,201 units, as against last year's 71,641 units. Domestic sales contracted more with 6 percent, but exports dipped at 25 percent at 13,100 units. Such contradictory performances further raise the stakes that come with the impending "Maruti Vs Hyundai" rivalry.

Conclusion

The "Maruti Vs Hyundai" debate is more than just a financial comparison; it encapsulates the evolving dynamics of the Indian automotive industry. As Hyundai Motor India prepares for its historic IPO, it stands on the brink of competing fiercely with Maruti Suzuki, which has dominated the sector for over two decades. With strong financial metrics and distinct strategies, both companies are well-positioned for future growth. However, Maruti's current financial performance pre-IPO appears to showcase a stronger growth trajectory compared to Hyundai's recent achievements. The upcoming IPO will not only reshape the market landscape but also redefine how investors view these two automotive powerhouses.