Minda Corporation (Minda Corp) is the flagship company of the Spark Minda Group and a leading supplier of major auto components to domestic as well as global Original Equipment Manufacturers (OEMs). Axis Securities likens the company’s growth story, driven by rising kit-per-vehicle prices, exiting loss-making operations and the prospect of an opportunistic inorganic acquisition by leveraging its cash-rich position.
The company has a large portfolio of EV products for e-2W and e-3W. “This 3x3x3 EV strategy will provide complete drive-train solutions to 3 segments (2W/3Ws/entry car) with 3 products (DC-DC converter, battery charger, motor controller) as well as products under 3kW in volume. new orders EV space Ola Electric, Ampere, Polarity and Revolt. The management believes that the transition to electric vehicles in India will be rapid as the latter was not cost-effective due to earlier adoption and cutting out the hybrid phase,” the brokerage firm said in a note.
Axis Securities expects Minda Corp’s profits to improve in FY22-23E on the backdrop of broader product basket, strong market share, consistent new product additions and operating leverage. “The company is expected to deliver excellent profitability growth till FY23E on account of features like better material-per-vehicle as well as higher indigenous content.” Axis Securities has a buy recommendation on Minda Corporation stock with a target price of Rs. ₹148 per share.
It has a well diversified presence across all segments including 2W, CV, PV, and its customer base includes Indian OEMs along with top marquee clients from Bajaj Auto, Ashok Leyland, TVS Motors, Suzuki Motors and M&M.
The brokerage believes that Minda Corp’s growth drivers include connected mobility solutions, light-weight solutions and vehicle access systems. Demand recovery (20% of revenue) in CV is expected to boost its topline further in the next 2-3 years.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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