Multibagger Alert: This automotive component maker has given returns of 109% in the past year!
The company is a big beneficiary of the rapid electrification of vehicles in India.
Auto ancillary manufacturer, Minda Industries Limited has given investors stellar returns of 109.92% over the last year. The share price of the company stood at Rs 505.4 on February 04, 2021, and since then, it has more than doubled investor wealth.
Minda Industries Limited is one of the leading manufacturers of auto components domestically with leadership across key product segments. With 20+ Product Lines, 1000+ Business Partners and over 23,000 employees, covering 50,000+ touchpoints, the company has six decades of experience in the auto space. The company is a big beneficiary of the rapid electrification of vehicles in India
In the quarter ended December 2021, Minda Industries’ revenues increased by 7% Y-o-Y and 3% Q-o-Q to Rs 2,181 crore for the quarter despite supply-side constraints adversely impacting auto industry volumes. EBIDTA was reported higher by ~3% Q-o-Q to Rs 235 crore for the quarter however lower on a Y-o-Y basis as the input cost pressure persists. EBIDTA margin remained stable at 10.8% vis-a-vis the previous quarter. PAT increased by 7% on a Q-o-Q basis to Rs 101 crore for the quarter however lower by 12% on a Y-o-Y basis.
Over the past few years, Minda Industries has aggressively invested in building its E-2W/3W capabilities and connected solutions by building strong customer relationships and this early mover advantage has resulted in several EV orders coming their way. The company has multiple products under production/development such as battery management systems-BMS, body control modules, on-board chargers, DC-DC converters, at its R&D centre. Thus Minda is well-positioned to take advantage of the transition to EVs with its entire EV-specific basket (the content of Rs 47,000 or 40% of vehicle cost) ready for production.
On the government policy front, several changes are benefiting the company, one of them being the recently introduced interoperability standards for battery swapping to facilitate fast EV adoption in the Union Budget of 2022, which is expected to benefit a company such as Minda Industries. In addition, the GOI issued a notification on January 14, 2022, proposing to make it mandatory for car manufacturers to have a minimum of 6 airbags in the PVs from October 1, 2022. This safety measure can create potential industry sales of around Rs 3,000 in the next five years. Such policies are fast-tracking the transition to EVs in the Indian automobile market which have contributed to the rise in the share price of the company.
At 2 pm on Monday, the stock of Minda Industries Limited was trading at Rs 1089.95, up by 2.73% or Rs 29 per share on BSE. The 52-week high of the scrip is recorded at Rs 1,260 and the 52-week low at Rs 460 on the BSE.
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