KR Choksey's research report on UNO Minda
In Q3FY25,UNO MINDA reported an operating revenue of INR 41,840 Mn, a growth of 18.8% YoY (-1.4% QoQ), missing our estimate by 2.4%. Q3FY25 EBITDA was INR 4,570 Mn, up 20.4% YoY (-5.3% QoQ), underperforming our estimate, primarily due to negative operating leverage. EBITDA margin was at 10.9%, up by 15bps YoY (-44bps QoQ). PAT for the quarter stood at INR 2,326 Mn, which grew by 20.2% YoY (-5.1% QoQ), missing our estimate. We lower our FY26E/FY27E EPS estimates by ~7.0%/5.0% respectively, factoring in weaker-than-expected Q3FY25 performance, gross margin compression from raw material cost headwinds, and challenges in the European auto industry. However, aggressive expansion in high-growth auto components such as alloy wheels, LED lighting, sensors, ADAS, and EV chargers along with capacity expansions, is expected to drive strong revenue growth through higher kit value and deeper client relationships.
Outlook
We forecast Revenue/EBITDA/Adj. PAT CAGR of 20.8%/23.4%/27.7% over FY24-FY27E. The stock trades at 45.0x/33.2x FY26E/FY27E EPS, and we roll over our valuations to FY27E, assigning a P/E multiple of 39.0x to arrive at a revised target price of INR 1,208 (previously INR 1,232). Consequently, we maintain a “BUY” rating on the shares of “UNO Minda Ltd.”
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