KR Choksey has given Accumulate recommendation for Minda Corporation with a target price of Rs. 224 in its research report issued on May 19, 2022

KR Choksey’s research report on Minda Corporation

Revenue reported at INR 9,478 Mn (including Minda Instruments Ltd-MIL) with 19.4% yoy growth (28.4% qoq) ahead of our estimates of INR 8,615Mn. Revenue excluding MIL stood at INR 8,095Mn (+1.9% YoY). EBTIDA stood at INR 1,077 Mn (+21.1% yoy / +36.9% qoq) and EBITDA margin stood at 11.4% (+16 bps yoy / +71bps qoq) despite higher commodity price and adverse impact of semiconductor shortage. Profit before tax reported at INR 719.2Mn (+11.6% yoy / +10.5% qoq). Finance costs declined by 12% qoq to INR 74.7Mn. Net Profit from continued operations reported at INR 758.6 Mn (+39% yoy / +8.6% qoq). It includes one-time tax benefits of INR 220Mn on account of past corporate guarantee payment for KTSN. Diluted EPS for the quarter stood at INR 3.17 as against INR 2.41 in Q4FY21.

Outlook

We apply a PE multiple of 17.0x to FY24 EPS to arrive at a target price of INR 224/share and maintain our ACCUMULATE recommendation on the stock with an upside of 5.7%.

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