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India Equity Institutional Research |Automobiles

Minda Industries Ltd.

RESULT UPDATE

INR 886
ACCUMULATE

Valuation & Views: MIL has market leader in switch gear segment. We believe MIL
has potential for growth because of its better capacity utilization, tie up with global
brands, innovative portfolio and large order inflow. The stock is currently trading
10.8x its FY 18E EPS of INR 82.1 respectively. We are valuing company 12x its FY18e
EPS of INR 82.1 and arrived at a target price of INR 985 and recommend
“accumulate” rating on the stock with a potential upside of 11.17% from current
levels.

Key Financials:
Particulars (INR Mn)
Net Sales
EBITDA
PAT
OPM (%)
NPM (%)
EPS
PE (x)

FY11
9542
837
355
10%
3%
26
20

Source: Company Data, KRChoksey Research

FY12
11792
759
289
7%
2%
18
30

FY13
13404
935
282
7%
2%
18
30

FY14
17061
595
71
5%
0.3%
5
117

FY15
22266
1514
681
8%
3%
43
12

Shares outs (Mn)

15.87

EquityCap (INR Mn)

158.7

Mkt Cap (INR Mn)

13152.4

52 Wk H/L (INR)

996/475

Volume Avg (3m K)

46.57

Face Value (INR)

10

Bloomberg Code

MNDA IN

Market Info:
24223

SENSEX

7455

NIFTY

Price Performance

160

120

Sensex

Minda Ind.

Share holding Pattern (%)
Particulars
Dec15
Sep15

Jun15

Promoters

70.9

70.9

70.9

FIIs

0.04

0.04

0.03

DIIs

2.82

2.82

2.84

26.24

26.24

26.23

100

100

100

Others
Total

Jan-16

Nov-15

80
Sep-15

Increasing Market Penetration through Acquisition: The Company’s broader
range of products and innovation has helped the company in acquiring more
customers in both domestic and international markets. Company’s recent acquisition
of global companies has also resulted in gaining access to international clients
thereby expanding its market share. Minda Industries is the market leader in the
switch segment. Clarton Horn's new facility (CKD based) in Mexico, is now operational
and commercial production will start from April 2016. Clarton Horn's supplies to
premium car makers like Mercedes, BMW, Porsche and Bentley. Through this
acquisition, the company gets access to these luxury OEMs to supply its other
products. Also, from November 2015, MJCL its (subsidiary) has started supplying to
WABCO which helps to increase revenue and market share of MIL.

Market Data

Jul-15

Margin surprise boosted profitability: MIL reported EBIDTA of 589 Mn with
growth of 45.2% y-o-y and de-growth of 6.8% q-o-q. EBIDTA margin remained at
9.4% with increase of 211bps y-o-y and decrease of 28bps q-o-q. Higher profitability
was due to increase in stock and lower price of raw material but on the other side
there was also expense incurred for employee cost around 34.3% y-o-y and 9.1% qo-q due to bonus provision made for FY16. Reported PAT stood at INR 289Mn, up by
123.5 y-o-y and 10.5% Q-o-Q. PAT margins was at 5.0% and increase to 275bps yo-y and 92bps q-o-q. PAT saw an increase due to higher other income during Q3FY16
of around 118.3% y-o-y and 65.4% q-o-o to INR 76Mn and depreciation of INR 217
Mn remained lower as compared to q-o-q by 11.7%.

Potential Upside : 11.17%

May-15

Revenue Growth with Expansion in progress: Minda industries reported net sales
of INR 6257Mn which is increased by 12.7% Y-o-Y and decreased by 4.0% Q-o-Q.
During 9MFY16, the revenue stood at INR 18100 Mn with the growth of 16% y-o-y.
We believe the revenue growth was due to better capacity utilization, new orders
received from its customers and also addition of new products in its business
segments. Going forward its revenue expansion will continue as it has started
operation at the Clarton’s new facility at Mexico, orders received from Jaguar/ Land
rover model for its lighting division. Minda Industries has also started supply its
product to its customer KTM, Austria which will help in gaining revenue for FY16.

Target Price (TP): INR 985

Mar-15

In Q3FY16, Minda Industries Ltd (MIL) reported net sales of INR 6,257mn
which is line of our estimates of INR 6189mn, increased by 12.7% y-o-y and
decreased by 4.0% q-o-q. EBIDTA stood at INR 589 Mn(our estimates of INR
564mn) and EBIDTA margins of 9.4 % respectively. In Q3FY16, growth in
EBITDA is about 45.2% y-o-y and de-growth of 6.8% q-o-q. Adjusted PAT
stood at INR 292Mn which is higher than our estimates of INR 271mn. PAT
saw a growth of 123.4% y-o-y and 10.5% q-o-q for Q3FY16 respectively.

Jan-15

Profit boosted by margins

Source: BSE

Name of Analyst:
Analyst :
Abhishek Jain

abhishek.jain@krchoksey.com
 91-22-6696 5502

www.krchoksey.com
 91-22-6696 5555
 91-22-6691 9569

KRChoksey - Institutional Research is also available on Bloomberg KRCS<GO>, Thomsonreuters, Factset and Capital IQ

February 04, 2016

Minda Industries Ltd.2% -7.5% 10.3% 6 -3 129 8.4% 217 373 6517 5885 -353 804 3750 873 812 0 632 9.Institutional Research .6% 1.7% 0 118.7% 245 387 5553 5147 -261 867 3064 816 660 0.0% 134.7% -3.4% 95. KRChoksey Research Key Concall Highlights: 2  Improvements in next year .2% 93.2% 7.1% 13 -20 261 16.3% 102.2 0 46 433 82 351 83 268 4.6% 148.4% -58.  7cr bonus liability provision is made for 2015-16  Working to improve margin q-o-q & y-o-y with the help of better capacity utilization and internal operational efficiency.0% 123.8% -28bps -11.1% 0 -6.0% 8.0% -3. Minority Interest & others EPS 26 76 475 71 404 90 314 5.0 406 7.0% 4 -30 289 18. Q3FY16 Result Snapshot: (INR Mn) Particulars Q3FY16 Q2FY16 Q3FY15 Q-o-Q Y-o-Y Net Sales Other operating income 6229 28 6450 67 5503 50 -3.7% 10. Margin will improve in 2016-17.5% 92bps -68.2% -44.6% 275bps -27.1% 895.2% 211bps 5.7% 12.3% 13.1% 34.8% 10.3% Source: Company Data.  Clarton Horn's new facility (CKD based) in Mexico.6% 0. is now operational and commercial production will start from April 2016.3% 13.3% Exceptional Items Other Income EBIT Interest EBT Tax PAT PAT Margin (%) Share of Profit/(Loss) of associate Minority Interest Profit/Loss after tax.7% 15.To achieved 20% EBITDA margin.7% -13.4% 9.3% 206 200 -4.3% 0 45.  New plant which is alloy wheel plant which become functional in April 2016.4% 122.1% 66.0% 9.1% 13.0% Net Sales & Other Operating Income Total Expenditure (Increase) / Decrease In Stocks Purchase of Finished Goods Cost of Raw Materials Operating & Manufacturing Expenses Employee Cost Selling & Distribution Expenses PBIDT (Excl OI) EBITDA Margins (%) Depreciation EBIT & exceptional Item 6257 5668 -435 870 3465 882 886 0 589 9.4 0 35 235 63 172 46 126 2.1% 8.7% 23.2 0 65. Better operational efficiency & capacity utilization & consolidation  MIL lighting division received new orders for Jaguar/Land rover model in India.9% 50.9% 17. KRChoksey .

KRChoksey Research 3 KRChoksey . Profit & Loss Statement (INR Mn) Particulars FY11 FY12 FY13 FY14 FY15 Revenues 9542 11792 13404 17061 22266 Op.current Assets 2910 3528 4491 5194 5216 Fixed assets 2573 2797 3608 4224 4205 Non-current investments 189 217 218 244 263 Long-term loans & adv 133 499 634 663 694 15 15 31 63 54 2685 4049 4075 5161 5491 230 20 Current Liabilities Short-term borrowings Trade payables Other cur liabilities & Prov Total Liabilities Assets Other non-current assets Current assets Current investments Trade receivables 11 1308 1963 2173 2610 2895 Inventories 838 808 895 1247 1406 Cash & bank balances 229 666 385 278 280 Short-term loans & adv 287 557 562 690 806 23 44 60 106 84 5596 7578 8568 10354 10709 Other current assets Total Assets Source: Company Data. KRChoksey Research Balance Sheet (INR Mn) Particulars Equity Share Capital 565 194 194 194 194 Reserves & Surplus 1422 2668 2895 2928 3459 Total Shareholders Fund 1987 2862 3089 3122 3653 115 123 138 213 Minority Interest Non. Expenses 8705 11033 12469 16466 20753 EBITDA 837 759 935 595 1514 Other Income 146 163 110 352 259 Depreciation 339 402 463 591 835 EBIT 644 520 582 356 938 Interest 167 198 191 242 250 PBT 477 322 391 114 688 Tax 122 0 110 76 194 0 -77 2 15 160 355 245 283 53 654 Minority 0 44 -1 18 27 Adj Pat 355 289 282 71 681 FY11 FY12 FY13 FY14 FY15 Exceptional Items PAT Source: Company Data.current liabilities 732 1113 1521 2051 1707 Long term Borrowings 552 661 887 1377 972 Deferred tax liabilities 103 6 -14 -16 -2 Other LT liabilities & prov 77 446 648 690 737 2877 3488 3835 5043 5136 950 938 808 1402 1116 1253 1773 2164 2473 2670 674 777 863 1168 1350 5596 7578 8568 10354 10709 Non.Institutional Research .Minda Industries Ltd.

Cash Flow Statement (INR Mn) Particulars PBT FY11 FY12 FY13 FY14 FY15 340 334 385 337 697 Adjustment 458 428 491 487 542 CF before W. KRChoksey Research Ratios Particulars PAT Growth (%) 52 -32 17 -81 1125 BVPS 120 178 192 195 228 PE (x) 20 30 30 117 12 EV/EBITDA(x) 14 15 12 21 8 Source: Company Data.cap 465 898 944 674 1241 Less Taxes -29 -73 -96 -72 -134 Net CF From Operations 436 825 848 602 1107 CF from Invst Activities -325 -194 -692 -629 -490 -16 -379 -315 -192 -577 Net inc /(dec) in cash 95 252 -159 -219 40 Op.cap -333 136 68 -150 2 Op CF after W.Institutional Research . balance of cash 227 479 320 102 142 FY11 FY12 FY13 FY14 FY15 Earnings Per Share (INR) 26 18 18 5 43 EBITDA (%) 10 7 7 5 8 PAT (%) 3 2 2 0 3 ROE (%) 29 11 10 2 20 ROCE (%) 20 11 12 7 18 Receivable days 39 47 52 48 42 Inventory Days 24 24 21 21 20 Payable days 51 51 58 53 46 Net Sales Growth (%) 53 24 14 27 31 EBITDA Growth (%) 34 -6 13 -9 87 CF from Fin Activities Source: Company Data. KRChoksey Research 4 KRChoksey .Minda Industries Ltd.cap 798 762 876 824 1239 Inc/dec in W. bal of cash 132 227 479 321 102 Cl.

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