The brokerage expects FY22 revenue of Rs 71.56 billion, at 45 per cent growth driven by underlying auto-sector growth.
Anand Rathi has given a buy rating to Minda Industries with a target price of Rs 328. The share price moved up by 0.13 per cent from its previous close of Rs 271.30. The stock’s last traded price is Rs 271.65.
The brokerage believes the introduction of products and new orders are the highlights for the quarter. Some of these products and customers are expected to arrest the current slowdown in the passenger-car and two-wheeler markets. In the brokerage view, the new products would allow the company to penetrate new customers and drive growth with de-risking the customer mix in the next 2-4 years.
Investment Rationale
While the FY21 margin is expected to decline to 10 per cent, the brokerage expects the FY22 margin to be 12.2 per cent with high-margin products such as two-wheeler alloy wheels, reverse parking sensors and higher volume growth.
The brokerage expects FY22 revenue of Rs 71.56 billion, at 45 per cent growth driven by underlying auto-sector growth, growth in product launches - higher alloy wheel business, seatings, and wireless chargers. Accordingly, it expects earnings of Rs 4.08 billion, leading to an EPS of Rs 15.6. The brokerage maintains its Buy rating, at a target of Rs 328 based on 21 times FY22e EPS.
Risk: Lower-than-estimated growth in OEMs in FY22.
Financials
For the quarter ended March 31, 2020, the company reported consolidated sales of Rs 1338.97 crore, up .91 per cent from last quarter sales of Rs 1326.84 crore and down -9.92 per cent from last year's same quarter sales of Rs 1486.46 crore. The company reported net profit after tax of Rs 13.12 crore in the latest quarter.
Promoter/FII Holdings
Promoters held 70.79 per cent stake in the company as of March 31, 2020, while FIIs held 10.91 per cent, DIIs 6.63 and public and others 11.66 per cent.
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