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Uno Minda in Q2FY25, reported a decent performance. Revenue during the quarter, saw a growth of 17.2% YoY to Rs.42.45bn vs est of Rs.44.18bn. Healthy top line growth was backed by strong growth in the switch and lighting segment which saw a growth of 13% and 16% respectively on yearly basis. Other segment saw a growth of 51% YoY basis during the quarter. Gross profit up by 19.8% YoY to Rs.14.9bn. EBIDTA margin for the quarter grew 28bps yearly basis to 11.4% vs (est of 11.3%). RPAT for the quarter jumped by 9% YoY to Rs.2.45bn. Net debt rose to INR 1,735 crores, mainly driven by Capex on capacity expansion and land acquisitions, reflecting Uno Minda’s long-term investment strategy.

* Operationally, key growth drivers included segments like lighting, switches, alloys, and EV components. The EV two-wheeler segment continued to excel, with a 58% YoY sales increase. Expansion efforts are underway in alloy wheel manufacturing and electric vehicle components, highlighted by new contracts with two-wheeler OEMs and increased battery production for EVs.

* Internationally, Uno Minda’s new plant in Indonesia will strengthen its position in Southeast Asia, while its joint ventures continue to expand in India, with airbag and safety system capacity projects underway. The company remains highly optimistic about long-term growth, preparing through capacity expansion, R&D investment, and strategic collaborations.

* In CSR, Uno Minda’s Suman-Nirmal Minda Foundation earned the CSR Science Award 2024, and the company was recognized as a Great Place to Work for the fourth consecutive year. The future outlook is positive, with anticipated growth across all business lines supported by the festive season’s strong performance, continuous product innovation, and a commitment to advancing new technologies in the auto industry.

View and Valuation: UNO Minda is capitalizing on high-growth areas within the auto components industry, with a focus on EV two-wheeler and three-wheeler components, alloy wheels, lighting systems, smart keys, and sensors. The company’s strategic investments in capacity expansion, particularly in alloy wheel manufacturing and lighting facilities, along with its ventures in emerging EV technologies and safety systems, position it well for sustained growth. With its diversified portfolio and growing client base, UNO Minda is expected to see strong revenue growth. We reiterate our BUY rating on the stock with a TP of Rs. 1,177 (45x of Sep-FY27E EPS).

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