Buy Minda Corporation; target of Rs 105: ICICI Direct
ICICI Direct is bullish on Minda Corporation recommended buy rating on the stock with a target price of Rs 105 in its research report dated December 24, 2020.
December 24, 2020 / 11:17 AM IST
ICICI Direct's research report on Minda Corporation
Minda Corporation (MCL) is the flagship company of the Spark Minda group and is a leading auto ancillary player supplying key auto components to domestic & global OEMs. Post its restructuring i.e. hive off of the European business, it has a well-diversified presence across segments with 2-W, CV, PV and aftermarket constituting ~53%, 23%, 10%, 14% of its sales (FY20), respectively. In terms of geographies, it realises ~85% of sales from India and rest ~15% from overseas. In terms of customer profile, the company counts all leading OEMs in India as its clients with top clients being Bajaj Auto, Ashok Leyland, TVS Motors, Suzuki Motors and M&M among others.
Hence, we assign a BUY rating. We value it at Rs 105 i.e. 15x P/E on FY22E-23E average EPS of Rs 7.0. We are enthused by MCL’s intent to clock ~12% margins & ~20%+ RoIC in future and would closely monitor its forward journey, consistency in performance for any further upgrades in our fair value calculation.
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