Buy Minda Industries ; target of Rs 575: ICICI Direct

The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

Minda Industries (MIL) is India’s largest maker of automotive switches, horns, seats & PV alloy wheels and third largest automotive lighting player. FY22 segment mix – 4-W 53%, 2-W 47%; switches, lighting, castings, horns and seats comprised 30%, 21%, 16%, 8% and 11% of sales, respectively • History of vast outperformance vs. user industries riding on growth in kit value, new client and product additions & inorganic acquisitions.

With forward estimates remaining unchanged, given the strong fundamentals (robust demand prospects, tech led product profile, benign raw material price outlook), we upgrade our valuation multiples (from 42x PE earlier to 46x PE on FY24E EPS) to now value MIL at Rs 575/share post this corporate action. We retain our BUY rating on the stock.

At 17:30 Minda Industries was quoting at Rs 496.35, down Rs 472.05, or 48.75 percent.

It has touched an intraday high of Rs 548.40 and an intraday low of Rs 492.75.

It was trading with volumes of 61,191 shares, compared to its thirty day average of shares, a decrease of percent.

In the previous trading session, the share closed down 0.24 percent or Rs 1.15 at Rs 484.20.

The share touched its 52-week high Rs 630.00 and 52-week low Rs 314.78 on 29 December, 2021 and 09 July, 2021, respectively.

Currently, it is trading 21.21 percent below its 52-week high and 57.68 percent above its 52-week low.

Market capitalisation stands at Rs 28,378.95 crore.