Shares of Uno Minda slipped 2 percent to Rs 1,090 on Monday, snapping a three-day winning streak, despite CLSA initiating coverage with an ‘Outperform’ rating, citing strong growth prospects in the quarters ahead. The stock gave up its early gains amid broader market volatility.
With a price target of Rs 1,304 per share, the international brokerage implies an upside potential of 17.5 percent from the last close of Rs 1,109 on the NSE. The brokerage expects the company to deliver industry-beating performance, driven by a revival in the auto sector and a diversified product portfolio.
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CLSA sees Uno Minda as a high-growth compounding story with a lean balance sheet and improving return on capital employed (RoCE). It also expects the company to reinvest a significant portion of its free cash flows into mergers, acquisitions, or new projects to accelerate its scale-up.
In Q4, Uno Minda reported a 7.5 percent year-on-year decline in net profit to Rs 266 crore, compared to Rs 287.9 crore in the same period last year. Revenue, however, grew 19.4 percent year-on-year to Rs 4,528 crore, up from Rs 3,794 crore a year ago.
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EBITDA rose 11 percent to Rs 526.8 crore from Rs 474 crore, but margins came under pressure. The EBITDA margin for the quarter stood at 11.6 percent, down 90 basis points from 12.5 percent last year.
Uno Minda is a global manufacturer of automotive components and systems, serving both internal combustion engine (ICE) and electric vehicle (EV) markets.
At about 9:50 am, shares of the company were trading at Rs 1,096, lower by 1.2 percent from the last close on the NSE. Uno Minda shares have risen over 20 percent in the last three months.
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