Buy Minda Industries, target price Rs 840: Emkay Global

Emkay Global has buy call on Minda Industries with a target price of Rs 840. The current market price of Minda Industries Ltd. is Rs 692.

Time period given by analyst is one year when Minda Industries Ltd. price can reach defined target.

Minda Industries Ltd., incorporated in the year 1992, is a Mid Cap company (having a market cap of Rs 19870.61 Crore) operating in Auto Ancillaries sector.

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 1608.69 Crore, down -28.41 % from last quarter Total Income of Rs 2247.17 Crore and up 282.26 % from last year same quarter Total Income of Rs 420.84 Crore. Company reported net profit after tax of Rs 29.90 Crore in latest quarter.

Investment Rationale
The Sep'22E TP of Rs 840 is DCF-driven and implies forward P/E of 32x. Minda deserves to trade at premium valuations, given its exposure to the PV segment, long term upside from EV adoption and a sustainable upward re-set in return ratios. Key risks: delay in auto sector or macro recovery, govt. allowing cheaper imports, adverse currency movements.

Promoter/FII Holdings
Promoters held 67.5 per cent stake in the company as of Aug 30, 2021, while FIIs held 9.5 per cent, DIIs 13.1 per cent and public and others 9.9 per cent.