Hold Minda Corporation Ltd For Target Rs. 590 By Axis Securities Ltd
Est. Vs. Actual for Q4FY25: Revenue – INLINE; EBITDA Margin – BEAT; PAT – MISS
Change in Estimates post Q4FY25
FY26E/FY27E: Revenue: -0.1%/-0.1%; EBITDA: -0.4%/-0.4%; PAT: 5.1%/-9.2%
Recommendation Rationale
Long-term Growth Drivers: (1) Premiumisation trend in legacy businesses like security access, driver information systems, wiring harnesses, die casting, and electronics. (2) New Products in EV, power electronics and EV charging stations. (3) Intelligent transportation systems in the EV bus segment. (4) other electronics, such as wireless chargers, telematics, etc.
Strong Order Book: In FY25, the total lifetime order book stood at Rs 8,000 Cr, reflecting an expanding product portfolio, product premiumisation, and rising demand for both IC and EV products across customers and segments. The company has secured multiple export orders for wiring harness with a lifetime value of Rs 700 Cr, with EV orders over 25%.
Robust EBITDA margins: On the back of a richer product mix led by premium 2Ws (both ICE and EV), better operating efficiencies, streamlining fixed costs, and component localisation initiatives, we expect EBITDA Margins to sustain between 11% to 12% in FY26/27E.
Sector Outlook : Positive
Company Outlook & Guidance: Going ahead, we expect strong demand in the 2W entry-level segment, demand for utility vehicles in PV, gradual recovery in CVs/Tractors, and a revival in exports. These will be positive triggers for the company to outperform industry growth.
Current Valuation: 33x FY27 EPS (earlier 30x)
Current TP: Rs 590/share (earlier Rs 600)
Recommendation: We recommend a HOLD rating (unchanged) on the company.
Financial Performance:
In Q4FY25, revenue (inline) grew by 9%/5% YoY/QoQ, led by increased production volumes across the industry, partly offset by weak exports. EBITDA stood at Rs 153 Cr (7% Beat), up 10%/6% YoY/QoQ. EBITDA margins (47bps beat) grew by 17bps/11bps YoY/QoQ based on the product premiumisation trend, increasing efficiencies and cost control efforts. PAT was reported at Rs 52 Cr (9% Miss), down 26%/20% YoY/QoQ on account of higher financing and depreciation costs being partly offset by the share of profits from associates
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