Minda Corp Q2 Results Review - Ebitda Inline; Orderbook Remains Strong: Axis Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Axis Securities Report.Minda Corporation Ltd.'s reported Q2 FY24 numbers largely in line with our estimates. Revenue (inline) grew by 4%/11% YoY/QoQ, led by increased production volumes in the passenger vehicle/three-wheeler/commercial vehicle segment, partly offset by lower volumes in the two-wheeler/tractor industry and weak exports. Minda Corp reported Ebitda of Rs 131 crore (inline), up 6%/15% YoY/QoQ and Ebitda margins (inline) grew by 18 basis points/31 bps in YoY/QoQ. Profit after tax was reported at Rs 59 crore (6% beat), up 2%/30% YoY/QoQ on account of lower depreciation and marginal profits in associates/subsidiaries (against our estimates of Rs 2 crore loss). .Outlook:We continue to like the company’s growth story driven by increasing kit value per vehicle and its focus on electric vehicle. With a strong order book and the management’s confidence in outpacing industry growth (organic/non-organic); we estimate a compound annual growth rate of 16%/22%/16% in revenue/Ebitda/PAT over FY23-26E. (In February-23, Minda Corp acquired a 15.7% stake in Pricol from the open market for Rs 400 crore and has filed a CCI application for increasing a stake up to 24.5%; the matter remains pending. Return on the capital allocated towards this investment, and future strategic intent will be the major near-term trigger/risk for the share price trajectory)..Valuation and recommendation:We value the stock at 20 times September- 25 earning per share (roll forward from June- 25 EPS) as it will be a key beneficiary of product premiumization, EV growth, increased business from commercial vehicle/passenger vehicle OEMs and growth opportunities via organic and inorganic routes in the future; We arrive at a target price of Rs 375/share implying an upside of 11%..Key risks to our estimates and target priceLower than expected two-wheeler/PV/CV industry demand.Macroeconomic headwinds on global demandGovernment regulations on EVs.Investment in Pricol and other strategic investments not generating a return on capital leading to inefficient capital allocation..Click on the attachment to read the full report:.Clean Science Q2 Results Review - Challenges Continue To Outweigh Benefits: Motilal Oswal.DISCLAIMERThis 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.

Minda Corp Q2 Results Review - Ebitda Inline; Orderbook Remains Strong: Axis Securities

Minda Corporation has won lifetime orders of ~Rs 6,500 crore during H1 FY24, out of which ~30% is for the EV business.

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