Shares of UNO Minda will be in focus after Honda Motorcycle & Scooter India (HMSI) made a global recall of bikes supplied by the company's Haryana plant.
HMSI recalled its bikes after spotting leakage of oil from the engine, caused due to dislodgement of sealing plug cone out of the engine cover (recalled part). The recalled part was supplied by the company's plant at Bawal, Haryana.
At 9.20am, shares of UNO Minda were quoting Rs 684.3 on the NSE, lower by 1.3 percent compared to the previous session's closing price.
Although the value of the recalled part supplied by the company is approximately Rs 3.2 crore, the likely amount intimated by HMSI due to this recall is pegged at Rs 76 crore. This is due to various costs incurred by Honda Motorcycle & Scooter India for the replacement of the recalled parts in various countries across the globe.
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"The company has an adequate product recall insurance policy and, it has accordingly, intimated the aforesaid matter to the insurance company.
[UNO Minda] is hopeful of settlement of this amount by the insurance company and does not foresee any material impact on financial or operational or other activities," said the firm in a filing with the exchanges.
Over the past six months, shares of UNO Minda have risen around 14 percent, underperforming the benchmark index Nifty 50 that has gained around 15 percent during the same time period.
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