Reduce Uno Minda; target of Rs 950: Emkay Global Financial

Reduce

Emkay Global Financial's research report on Uno Minda

Uno Minda posted healthy Q2 results with outperformance vs MSIL accelerating further and logging a ~6% beat on consolidated EBITDA (margin up by 68bps QoQ to 11.4%). Uno expects healthy industry growth in the medium term, with sustained outperformance and retained margin guidance (toward the upper range of 10.5-11.5%). We expect further support for content per vehicle from order wins/execution and market share gains, though margin improvement is likely to be gradual amid ongoing capex. Our estimates are unchanged (buildin 18%/24% revenue/EPS CAGR over FY24-27E).

Outlook

While enhanced outperformance vs key clients is encouraging, valuations remain rich (stock trades above 1SD from LTA); we retain REDUCE, and nudge up our TP to Rs950 at unchanged multiple of 38x, rolled-over to Sep-26E PER vs Jun-26E earlier.

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Uno Minda - 22112024 - emkay