Maruti Suzuki India Vs Hyundai: Which Car Stock is Better?

The Indian four-wheeler auto segment is primarily dominated by two companies: Maruti Suzuki India Limited and Hyundai India Motor Limited. Both of these companies offer a wide range of passenger vehicles, including hatchbacks, sedans, SUVS, etc. Maruti was listed in 2003, whereas Hyundai India was listed on the Indian Stock Exchange in 2024; therefore, the long-term returns of both cannot be compared. However, there are certain other parameters that can be considered while comparing both of them.

In this blog, we will help you find the answer to the question of which stock is better among Hyundai India Motor Limited and Maruti Suzuki India Limited based on various parameters.

Overview of Maruti Suzuki India Limited

Maruti Suzuki India Limited was established in 1981, and initially it was known as Maruti Udyog. It was a joint venture between the Government of India and Japanese automaker Suzuki Motor Corporation and eventually became its subsidiary. Now, it is one of the largest passenger vehicle manufacturers in India. The company holds a prominent position in the Indian passenger vehicle market and holds around 42% market share as of FY 24. Maruti Suzuki has manufacturing units in Gurgaon and Manesar and is planning to commence operations at a new plant in Kharkhoda, Haryana. Maruti Suzuki has invested a huge amount in localising the manufacturing of batteries by signing an MOU worth 150 billion yen with the Government of Gujarat. The company exports its cars to over 100 countries across the globe. The company’s headquarters are situated in New Delhi.

Business Model

• Maruti Suzuki India Limited’s core business is manufacturing and selling vehicles. It offers a wide range of cars to every customer segment. The segments covered are entry-level hatchbacks, compact cars, sedans, SUVs and MPVs.
• The company distributes their product through two channels: Arena, which sells budget-friendly cars, and NEXA, which caters to the needs of premium customers.
• It offers other services like selling pre-owned cars through True Value, insurance broking, financing, driving schools, and selling accessories and spare parts.

Read Also: Maruti Suzuki Case Study: Business Model and Marketing Strategy

Overview of Hyundai Motor India Limited

Hyundai Motor India Limited is a wholly owned subsidiary of the South Korean company, Hyundai Motor Company. It started its operation in India in 1996 and soon became India’s second-largest car manufacturing company by sales, just behind Maruti Suzuki. The company has two plants situated in the state of Tamil Nadu, with an annual combined capacity of more than 8 lakh units. The company also acquired a plant in Talegaon, which was earlier owned by General Motors India. The company offers a diversified portfolio of passenger vehicles to its customers, which includes hatchbacks, sedans, SUVs, and electric vehicles. It is the largest exporter of cars in India, and it exports its products to over 92 countries. It also set up a Research and Development centre in Hyderabad, which primarily focuses on innovating passenger vehicles. The company launched its IPO in 2024, which was one of the largest IPO of the year. The headquarters of Hyundai Motor India Limited is situated in Gurugram, Haryana. 

Business Model

• The company’s core revenue source is selling passenger vehicles, and catering to the needs of different customers who wish to have a hatchback, sedans, SUVS, and electric vehicles. 
• It also has a strong dealer network of more than 1,500 dealers spread across India.
• The company also offers maintenance, service, accessories and spare parts through their service centres.

Read Also: Hyundai Motor India Case Study: Business Model, Financial Statements, And SWOT Analysis

Comparison of Market Details

Particulars	Maruti Suzuki India Limited	Hyundai Motor India Limited
Current Market Price (₹)	12,615	1,757
Market Capitalisation (In ₹ Crores)	3,96,555	1,42,661
52 Week High (₹)	13,680	1,970
52 Week Low (₹)	10,725	1,542
Book Value (₹)	3061	161
Face Value of Share (₹)	5	10
P/E Ratio (x)	27.4	24

Performance Comparison

Return	Maruti Suzuki India Limited	Hyundai Motor India Limited
1 Month	6.50%	6.39%
6 Months	13.30%	-2.46%
1 Year	-0.39%	NA
5 Years	147.53%	NA
YTD	12.64%	-2.21%

Inference: In the short term, Hyundai Motor India has underperformed as compared to Maruti, which has been a consistent performer in the longer period. However, it would be unfair to compare the price performance of both companies as Hyundai was recently listed.

Income Statement Comparison

Particulars	Maruti Suzuki India Limited	Hyundai Motor India Limited
Sales	1,41,858	69,829
Total Revenue	1,45,951	71,302
Total Expenses	1,28,587	62,904
Profit After Tax	13,234	6,060

Inference: As of March 2024, Maruti Suzuki India Limited has outperformed Hyundai Motor India Limited both in terms of revenue and profit. 

Balance Sheet Comparison

Particulars	Maruti Suzuki India Limited	Hyundai Motor India Limited
Current Assets	22,634	16,124
Non-Current Assets	92,717	10,225
Total Shareholder Funds	85,636	10,666
Current Liabilities	25,952	26,349
Non-Current Liabilities	3,763	2,686

Inference: Maruti Suzuki India Limited has more than 4x the assets of Hyundai Motor India Limited and almost equivalent total liabilities.

Cash Flow Statement Comparison

Particulars	Maruti Suzuki India Limited	Hyundai Motor India Limited
Cash Flow from Operating Activities	16,801	9,251
Cash Flow from Investing Activities	-11,864	-10,090
Cash Flow from Financing Activities	-4,062	-15,930

Inference: Maruti Suzuki India Limited has a higher cash flow from operating activities, whereas, Hyundai Motor India Limited has a significantly higher cash outflow from financing activities, when compared to Maruti.

Key Performance Ratios

Particulars	Maruti Suzuki India Limited	Hyundai Motor India Limited
Operating Profit Margin (%)	12.24	12.02
Net Profit Margin (%)	9.32	8.67
ROE (%)	15.75	56.81
ROCE (%)	19.42	62.89
Debt to Equity (x)	0	0.07

Inference: Being a company that is aggressively expanding, Hyundai Motor India Limited has better ROE and ROCE, but the net and operating profit margins of Maruti Suzuki India Limited are higher.

Shareholding Pattern

Particulars	Maruti Suzuki India Limited	Hyundai Motor India Limited
Promoter (%)	58.28	82.50
FII (%)	14.96	7.17
DII (%)	23.64	7.01
Public (%)	2.62	3

Inference: Hyundai Motor India Limited has higher promoter holdings. But FIIS holds only a 7% stake in it, whereas they hold around 15% stake in Maruti Suzuki India Limited.

Read Also: Mahindra & Mahindra vs Tata Motors: Which is Better?

Which Stock is Better?

Maruti Suzuki India Limited focuses on reliability and affordability, whereas Hyundai Motor India Limited focuses on modern design and advanced features. However, in terms of revenue and profit, Maruti Suzuki is ahead of Hyundai by a long way. However, in terms of ROE and ROCE, Hyundai Motor is ahead of Maruti Suzuki India Limited. On the other hand, Hyundai Motor India Limited has already launched its electric vehicles, and announced its plans to manufacture them in India. Maruti Suzuki India Limited is focusing on the affordable passenger vehicle segment and dominates the segment. However, it is advisable to consider the risks which the automobile sectors have, such as cyclical business, production cost, government regulations, etc. Choosing the best stock depends on the investor’s risk profile. An aggressive investor can go for Hyundai Motor India Limited, and Maruti Suzuki India Limited is suitable for conservative investors. It is advised to consult a financial advisor before investing.

Conclusion

On a concluding note, Maruti Suzuki India Limited offers stability to your portfolio during market downturns and has the potential to deliver moderate returns. Hyundai Motor India Limited can be considered an aggressive investment option as it presents high risks in the form of higher debt to equity ratio, which can result in high volatility. However, it is always best to consult your investment advisor before making any investment decision.

One can easily invest in both the shares using the Pocketful mobile application, where you can buy them without paying any brokerage on delivery. So open a free demat account with Pocketful now.

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