Buy UNO Minda; target of Rs 1208: KR Choksey

KR Choksey is bullish on UNO Minda has recommended buy rating on the stock with a target price of Rs 1208 in its research report dated February 07, 2025.

Broker Research

February 10, 2025 / 11:59 IST

Buy

26 Aug, 2025 12:21

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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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