Buy Minda Industries; target of Rs 1135: Emkay Global Financial

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26 Aug, 2025 12:21

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We interacted with Chairman Mr. Nirmal Minda and visited the company’s R&D center. Management has reiterated that MNDA is well-placed to outpace the underlying industry thanks to increasing content per vehicle (CPV), market share gains and EV adoption. MNDA is focusing on strengthening its own R&D capabilities and exploring tie-ups and acquisitions with a focus on PACE opportunities (Personalization, Autonomous, Connected and Electrification). It is likely to benefit immensely from EV adoption in 2Ws, with a multifold increase in potential kit values from up to Rs7,300 in ICEs to up to Rs56,300 in EVs. We expect growth momentum to continue over FY22-24E with a revenue CAGR of 23%, led by 1) a cyclical upturn in underlying PV (17% CAGR) and 2W (12% CAGR) segments, 2) increasing content in core businesses such as switches, lightings and acoustics, 3) improving market presence in alloy wheels, sensors, airbags, controllers and blow molded parts, and 4) growing content per vehicle led by EV penetration.

We build in an earnings CAGR of 54% over FY22-24E. ROIC (post tax) should expand from 13% in FY22E to 22% in FY24E, driven by improved profitability in both core and emerging segments. After annual capex of Rs6.5bn in the next two years, average annual FCF is likely to be robust at Rs3.7bn. Recommend Buy with a DCF-based TP of Rs1,135, based on 40x FY24E P/E.

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