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Buy Minda Industries; target of Rs 321: Sushil Finance

Sushil Finance is bullish on Minda Industries and has recommended buy rating on the stock with a target of Rs 321 in its November 12, 2012 research report.

November 27, 2012 / 05:43 PM IST
 
 
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Sushil Finance is bullish on Minda Industries and has recommended buy rating on the stock with a target of Rs 321 in its November 12, 2012 research report.
 
“Founded in 1958 and headquartered in Manesar (Haryana), Minda Industries Ltd. (MIL) is engaged in diversified businesses of manufacturing of auto electrical parts including switches, lights, horns, gas kits and batteries for the off road, two, three and four wheelers. The Company caters to both domestic and international markets. Additionally, the Company has a good hold in both OEMs and After-market segments. During FY12, the Company recorded 10% of its top-line from overseas markets. For technological advancements, the Company has tied up with several global leaders in each business segment. The Company commands a prominent market share in each of its business segments and leads the switches market with dominating 70% share. The Uno Minda group registered a turnover of above Rs.20,000 mn during the last fiscal year.”
 
“Anticipating a huge demand from the domestic and other emerging economies, the longterm prospects of the automobile industry remain strong and intact. The country is already on its way of becoming a manufacturing hub for global auto-giants. This run is likely to benefit the auto-components industry the most. Currently, the auto components industry in India is two-thirds the size of the OEM segment. This proportion is around one to two times in the mature markets of Europe, America and Japan. Thus, the size of the Indian auto ancillary market is likely to grow at a rate faster than the OEM segment; largely driven by OEMs thrust on localization and steadily growing demand from replacement market.”
 
“Given its strong positioning in the switches supplies to both two and three wheelers segments, strong client-base, technological collaborations, healthy balance sheet & ensuing growth visibility from the anticipated growth in the auto-components market coupled with expanding operations over the next 2-3 years, we expect MIL to post an APAT growth of 45.6% in FY13 & 24.0% in FY14. At the CMP of Rs.203* (Price at 12:15 PM on Monday, November 12, 2012), the stock trades at an attractive valuation of 6.3x its FY14E earnings of Rs.32.12. We recommend a “BUY” with a target price of Rs.321 (10x FY14E earnings),” says Sushil Finance research report.


Public holding more than 90% in Indian cos


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To read the full report click on the attachment

first published: Nov 27, 2012 04:18 pm