Minda Corporation (Minda Corp) is the flagship company of the Spark Minda group and is a leading supplier of key auto components to domestic as well as global original equipment manufacturers (OEMs). Axis Securities continues to like the company’s growth story driven by increasing value of kit-per-vehicle, exit from loss-making operations, and the possibility of an opportunistic inorganic acquisition by leveraging its cash-rich position.
The company has a large portfolio of EV products for e-2Ws and e-3Ws. “It’s 3x3x3 EV strategy will provide complete drive-train solutions to 3 segments (2Ws/3Ws/Entry cars) with 3 products (DC-DC converter, Battery Charger, Motor Controllers) as well as products less than 3kW. New orders in the EV space have been won from Ola Electric, Ampere, Polarity, and Revolt. The management believes the shift to EVs in India would happen faster due to earlier adoption and cutting out the hybrid phase as the latter was not cost-effective," the brokerage firm said in a note.
Axis Securities expects Minda Corp’s profitability to improve over FY22-23E in the backdrop of its wide product basket, robust market share, consistent new product addition, and operating leverage. “The company is expected to deliver excellent profitability growth by FY23E owing to the attributes such as improved content-per-vehicle as well as higher indigenous content." Axis Securities recommends a Buy on Minda Corporation's stock with a target price of ₹148 per share.
It has a well-diversified presence across all segments including 2W, CV, PV, and its customer base comprises Indian OEMs with top marquee clients being Bajaj Auto, Ashok Leyland, TVS Motors, Suzuki Motors, and M&M.
The brokerage believes Minda Corp's growth drivers include connected mobility solutions, Light-weighting solutions, and vehicle access systems. Demand recovery in CVs (20% of revenues) is expected to further boost its topline over the next 2-3 years.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
