EQUITY RESEARCH-Minda Industries Ltd July 15, 2009 "Change is the investor's only certainty.

" ~Thomas Rowe Price, Jr.

Minda Industries Limited

Minda Group
Stock Overview
CMP: - 146 52 Weeks(Low/High): -73/371 Target: -243-263 Return: -66%-80% Recommendations: - Buy

Minda Group; founded in1958, Indias foremost manufacturer of range of automotive components & a global supplier to original equipment manufacturers. Their product portfolio comprises of switches, batteries, lighting, horns, mirrors & alternate fuel kits- LPG/CNG fuel kits. Minda Group companies are;

Minda Industries Ltd.

Minda Industries Limited is the flagship company of the Minda Group. It designs, develops and manufactures switches for 2/3 wheelers and off-road vehicles. In addition, Minda Industries Limited manufactures batteries for 2/3 wheelers and off-road vehicles. Minda Industries already enjoys more than 70% market share in the 2/3 wheeler segment in India and is amongst the top few globally.

Mindarika Pvt. Ltd.

Mindarika Pvt. Limited is India's largest four wheeler automotive switch manufacturer. Mindarika Pvt. Limited has consciously evolved into a complete design and development centre for four wheeler automotive switches. It offers customized solutions to the automotive industry in the realm of product improvisation and new product development and has very strong localization capabilities.

MIL Lighting
The Lighting division of Minda Industries Limited develops and manufactures world-class lighting products for 2/3 wheelers, off-roaders and 4 wheeler vehicles. At the Lighting division, the emphasis is on rapid development of new products. The mix of excellent resource planning, latest infrastructure, skilled manpower and high technological competence helps the company in its mission to manufacture globally competitive products. The Lighting Division of Minda has 3 state of the art,

fully equipped manufacturing facilities based at Manesar, Pune & Sonepat and employ around 500 people. 1|Page

EQUITY RESEARCH-Minda Industries Ltd July 15, 2009

Minda Fiamm Acoustic Ltd

Minda Fiamm Acoustic Limited is a Joint Venture between Minda Industries Limited and Fiamm S.p.A, Italy to produce 2/3 wheeler automotive horns. The Company has manufacturing facilities in Delhi, Gurgaon and Pantnagar and employs over 300 people. Today, Minda Fiamm is the leader player in the Indian automotive horn industry. It offers customized products and solutions for a range of automotive acoustic problems. Minda Fiamm utilizes the experience of its joint venture partner, FIAMM S.p.A. of Italy, to offer R&D expertise and capabilities to the Indian customer. Stock in News
Net profit of Rs 7.11 crore in Q-4 ended March 31, 2009, up 58.35% over the corresponding period a year ago A dividend of Rs 2.50 per equity share of Rs 10 each and Re 0.90 per cumulative redeemable

Fiamm Minda Automotive Ltd

FMAL is a Joint Venture of Fiamm SpA with NK Minda Group. FMAL was established in July 2004 as a part of Fiamms global manufacturing strategy and with a view to enhance Fiamms presence in India and other ASEAN Markets. FMAL services the requirements of Fiamms global customers such as General Motors, Ford, PSA, Renault, BMW, DC, Mazda and major domestic customers like Ford India, General Motors India, Maruti, Tata Motors and Ashok Leyland. FMAL has established a production capacity of 17 million horns/ annum and FMAL vision is to supply at least 40% requirement of Fiamms global original equipment (OE) customers.

preference shares of Rs 10 each for the year 2008-09 Toyota Kirloskar Motor (TKM) had tied-up with leading CNG kit

Minda Autogas Ltd

Minda Autogas Limited began as Minda Impco Limited - a Joint Venture between NK Minda Group and Impco Technologies Inc, USA. In April 2006, Impco, as part of their global strategy, decided to exit all Joint ventures including the one in India. Today, Minda Autogas Limited is a fully owned company of the NK Minda Group. Minda Autogas provides CNG / LPG kits and other alternative fuel solutions to various OEMs and the replacement market. Minda Autogas has been supplying Maruti Udyog Limited with the LPG kits for Wagon R Duo.

supplier Minda Auto Gas to supply the gas kits which had advanced Lambda control system that meets Euro III emission norms- February 28, 2009. Delhi government notified that light commercial vehicles (LCVs), both three-wheelers and sub-one ton four wheelers, have to convert to CNG by September 30 to ply in the city-Minda to be the Largest Beneficiary out of 200Cr.revenue share.

PT Minda ASEAN Ltd

Recognizing the importance of the ASEAN market, the Minda Group has set up a Greenfield manufacturing facility in Indonesia through a company named PT Minda ASEAN Automotive. The project that was conceptualized in October 2004 began its production in Indonesia in December 2005. Today PT Minda ASEAN boasts of a state of the art manufacturing facility in Indonesia. In a short span, the ASEAN venture started to acquire renowned ASEAN OEM customers and is today exporting to Malaysia, Vietnam, Philippines & Thailand. The product range comprises of switches and locks for two wheelers and is going to start manufacturing other Group product lines.

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EQUITY RESEARCH-Minda Industries Ltd July 15, 2009

Minda Autocare Ltd

Minda automotive components are available to OEMs directly through the individual Minda Group Companies. For the replacement market and for retail customers, these products are available through a dedicated sale and Service Company called Minda Autocare Ltd. Established in 1985, Minda Autocare Ltd. is the Sales and Servicing arm for the Minda group in the replacement market. Minda Autocare Ltd. builds upon the competitive advantage of Minda Group products through its countrywide distribution network of more than 250 dealers spread across 91 A, B and C category cities, covering the 2 wheeler as well as 4 wheeler business segments. Minda Autocare's product range spans approx. 2500 parts and components that it procures from 15 countrywide supply points, and in turn distributes to its dealer network through 18 Depots in all major states of the country. Minda Autocare Ltd. also has aggressive plans to grow internationally, through the conventional Exports route, as well as through the development of its own infrastructure and facilities in key geographies worldwide, in an attempt to tap the vast and growing global after market for automotive components.

Management Views
But now with sales looking encouraging, we are re-thinking of some of the investments, said Mr Minda on May 10, 2009 As of now signals are better. We are going back level. to In normal some

production

components it is 80-85 per cent of capacity utilization. In other parts it is up to 90 per cent, said Mr Nirmal Minda on May 10, 2009. Last year, on a low base, we grew by 20 per cent. This year, with more car companies like Maruti Suzuki preparing to roll out models with factory-fitted CNG kits, we expect to grow 100 per cent, said Mr Minda on July 5, 2009

Product Portfolio
The Group has a huge portfolio for 2/3 wheeler segments as well as Passenger Cars & most important thing to be noticed is the products in their portfolio are mostly necessary products for vehicles. Their product portfolio mainly consists of; Horns: - For 2/3 wheelers & Passenger Cars Lights: - For 2/3 wheelers & Passenger Cars Variety of world-class Switches: - For 2/3 wheelers, Passenger Cars and off road vehicles. This segment of their Product Portfolio includes; Lever Combination Switches, Panel Switches, Power Window Switches, Plunger type Switches, Oil Pressure Switches and Heating Ventilation & Air-conditioning (HVAC) Switches. Ash Tray & Lighters CNG & LPG Kits: - Minda Autogas designs and develops Alternate fuel kits for 2/3 wheelers, Passenger Cars as well as Gensets. Batteries

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EQUITY RESEARCH-Minda Industries Ltd July 15, 2009

Valuation
Minda Industries Type of Result Sales Turnover Other Income Total Income Total Expenses Operating Profit Gross Profit Interest PBDT Depreciation PBT Tax Net Profit EPS Dec '08 Mar '09 Jun '09 Mar '09 Jun '09

Important Stats
% Increase in revenue: - 14.74% % Decrease in Expense: -3.92% EPS(TTM): - 14.43 PER: - 10.39 Industry PER:- 25.71

Quarter Quarter Quarter(P) Yearly TTM(P) 108.97 111 122.30 454.51 472.06 0.14 0.47 0.82 3.27 1.58 109.1 111.48 123.12 457.78 473.64 96.56 91.92 101.28 398.89 405.01 12.41 19.08 21.02 55.62 67.05 12.55 19.55 21.84 58.89 68.63 5.07 3.8 4.12 16.48 17.38 7.48 15.75 17.72 42.41 51.25 4.63 6.29 5.36 21.44 21.82 2.85 9.46 12.36 20.97 29.43 0.85 2.35 3.46 5.81 8.10 2 7.11 8.90 15.16 21.33 1.9 6.77 8.47 14.43 20.30

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EQUITY RESEARCH-Minda Industries Ltd July 15, 2009

Analyst View: - The Company had also put on hold Rs 50-crore investment at Bawal to make lighting products mainly to supply to Maruti. We have not included the figures that would arise due to CNG Kits Supply. The reason behind is people are not so fast about this CNG conversion rule by Delhi Government & they are looking for other alternatives. Projections & circumstances show a prospective conversion of around 15000 LCVs out of 25000 LCVs. This means the market for this would be around 60% of expected figure which was 375Cr. This means a revenue increase of 225 Cr. in CNG kits supply segment. Minda being the largest supplier of CNG kits to original equipment manufacturers (OEMs) would be benefitted in future & its revenue may spurt in an unprecedented way. According to Industry data taken from Society of Indian Automotive Manufacturers (SIAM), we found that production of two wheelers has increased by 76% in Q1-(09-10) as compared to Q4-(08-09) & at the same time total automobile production has increased by 10.54%. Based on weights we found that sales for the 2/3 wheelers as well as passenger cars in which Minda has around 70% market share would have increased by 10.18% in Q1-(09-10). Also, due to increased demand, company started operating on 85-90% capacity again; there would be a reduction in expense of the company. The stocks of company are priced at a PER of 10.25 while Industry PER is 25.71. We expect its Trailing Twelve Months EPS to reach at 20.30 & PER to improve and touch a level of 12-13. Thus, we recommend a buy on this stock with a target of 243-263 in future.
For more details contact: - Dishant Tandon (+919176321422)
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