Emkay Global Financial's report on Minda Industries
Q4 EBITDA declined by 9% yoy to Rs2.8bn, 5% above our estimates owing to a higherthan-expected gross margin. Revenue grew by 8% to Rs24.2bn (est.: Rs23.7bn), slightly above estimates due to higher revenues in switches and acoustics. We expect growth momentum to continue over FY22-24E, with a revenue CAGR of 22%, driven by 1) a cyclical upturn in underlying PV/2W segments; 2) higher content/vehicle in core businesses, such as switches, lightings and acoustics; 3) improving presence in alloy wheels, sensors and controllers; and 4) growing content/vehicle led by EV penetration. We build in an FY22-24 earnings CAGR of 51%. RoIC is likely to expand from 11% in FY22 to 20% in FY24E, supported by improved profitability in the core and emerging segments. Net debt-to-equity should improve from 0.2x in FY22 to 0.1x in FY24E.
Recommend Buy with a DCF-based TP of Rs1,135 (unchanged), based on 38x Jun’24E EPS (earlier 40x Mar’24E EPS). We reduce the target multiple to account for an increase in the cost of equity.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.