ICICI Direct has given Buy recommendation for Minda Corporation with a target price of Rs. 120 in its research report issued on Mar 30, 2021
ICICI Direct’s research report on Minda Corporation
Minda Corporation (MCL) reported strong Q3FY21 results. Consolidated net sales rose 36% YoY to Rs 740 crore (like-to-like basis) – far outpacing the growth observed in the domestic OEM space. Blended operating margins rose 100 bps QoQ to 11.1% (110 bps increase in mechatronics division to 13.8%; 40 bps increase in information connected systems division to 7.1%) amid 80 bps QoQ gross margin expansion and 80 bps savings in other expenses on percentage of sales basis. Consequent consolidated PAT was up 19% YoY to Rs 49.5 crore.
FY21E-23E PAT CAGR at MCL is seen at ~62% (albeit on a low base). Broad-based positivity across served segments domestically, new order wins along with structural margin tailwinds help us maintain BUY on MCL. We value it at Rs 120, 15x P/E FY23E EPS (previous target price Rs 105) and remain enthused by its long term vision to clock ~12% margins and ~20%+ RoIC.