Buy Minda Corporation, target price Rs 270: ICICI Direct

ICICI Direct has buy call on Minda Corporation with a target price of Rs 270. The current market price of Minda Corporation is Rs 216.75. Time period given by analyst is one year when its price can reach defined target.
Minda Corporation, incorporated in the year 1985, is a small cap company (having a market cap of Rs 5208.35 Crore) operating in auto ancillaries sector.

Its key products/revenue segments include other auto components, other operating revenue, scrap, duty drawback, royalty income and job work for the year ended March 31, 2022.

Financials
For the quarter ended June 30, 2022, the company has reported a consolidated total income of Rs 1014.46 crore, up 6.53 per cent from last quarter total income of Rs 952.31 crore and up 79.14 per cent from last year same quarter total income of Rs 566.30 crore. Company has reported net profit after tax of Rs 52.88 crore in latest quarter.

The company’s top management includes Mr.Ashok Minda, Mr.N K Modi, Mr.Aakash Minda, Mr.Ravi Sud, Mr.Rakesh Chopra, Mr.Ashok Kumar Jha, Mrs.Pratima Ram, Mr.Avinash Parkash Gandhi. Company has B S R & Co. LLP as its auditors. As on June 30, 2022, the company has a total of 24 crore shares outstanding.

Investment Rationale
MCL’s share price has grown at ~12 per cent CAGR over five years from ~Rs 125 levels in September 2017, outperforming broader Nifty Auto Index.

The brokerage retains BUY rating amid industry tailwind of double digit volume growth, lean b/s, healthy return ratios and penchant to grow ahead of industry.

Promoter/FII Holdings
Promoters held 64.73 per cent stake in the company as of June 30, 2022, while FIIs owned 3.69 per cent, DIIs 13.96 per cent.