Uno Minda sees long-term growth beyond FY27, Nomura raises price target despite profit squeeze

Shares of automotive OEM supplier Uno Minda were over a percent higher in early trade on May 22 after the auto components manufacturer recorded 19 percent YoY revenue growth while the net profit declined 7.5 percent during the March quarter.

Nomura believes Uno Minda is a key beneficiary of industry tailwinds of premiumization and EV adoption, along with strong execution across newer segments. This includes sensors (including ADAS)/controllers/CNG and should sustain the growth momentum for the company.

The management sees long-term growth visibility beyond FY27, however, brokerages have suggested that significant investments will impact free cashflow generation in the near term. Nomura's estimates for FY26/27F are largely unchanged with a 'Buy' rating, but it has raised the target price to Rs 1,242.

For the quarter ended March 2025, Uno Minda reported a 19.4 percent year-on-year increase in revenue, which rose to Rs 4,528 crore from Rs 3,794 crore in the same period last year. However, despite the strong revenue growth, net profit declined by 7.5 percent year-on-year to Rs 266 crore, compared to Rs 287.9 crore in the year-ago quarter.