Minda Corp - Acquires Stake In Pricol As Financial Investment, Strategic Intent Not Dispelled: ICICI Direct

ICICI Direct Report

Minda Corporation Ltd. on Friday February 17, 2023 acquired 1.91 crore shares comprising ~15.7% of share capital of Pricol Ltd. for ~Rs 400 crore (~Rs 209 per share) from open market stating it as financial investment transaction only.

We see less merit in this transaction to be just a financial investment and believe it to have a strategic intent to either acquire Pricol in full or seek controlling stake or buyout of the Instrument cluster division given the potential content increase in this domain and healthy technological capabilities and customer profile at Pricol.

The valuations and quantum of further investments for this strategic intent cannot be ascertained at this point in time with risk of company overpaying for it and lack of clarity on further line of action in this domain.

Key triggers for future price performance:

• Robust orderbook with incremental wins in the electric vehcile space impart healthy revenue visibility. We build 23.3% (FY22-25E) consolidated sales compound annual growth rate.

• Benign raw material price outlook, operational efficiencies and localisation efforts to lead margin recovery, return on capital employed to 11.8%, 19.8%, respectively, by FY25E.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.