Share of Minda Industries Limited has delivered 126 per cent return to its shareholders in one year. The share stood at Rs 303.48 on July 13, 2020. It has zoomed to Rs 684 today, translating into gains of 126 per cent during the period. In comparison, Sensex rose 43 per cent in one year.
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Rs 5 lakh invested in the share of auto component maker a year ago would have turned into Rs 11.26 lakh today.
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The stock has gained 69 per cent since the beginning of this year. It opened 0.8 per cent higher at Rs 659.00 against the previous close of Rs 653.70 on BSE. It continued its strong upside momentum and rose 5 per cent to hit an intraday high of Rs 684.00 on BSE.
With a market capitalisation of over Rs 18,000 crore, the share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages.
According to MarketsMojo, the company has a strong ability to service debt as it has a low Debt to EBITDA ratio of 0.86 and the valuation seems to be attractive. The technical trend has improved from Mildly Bullish on July 9, 2021, and the stock is technically in a Bullish range now and has generated a 3.64 per cent return since then.┬а Multiple factors for the stock are Bullish like MACD, Bollinger Band, and KST.
It noted that the near term sales trend is positive. Also, the company has been reducing its borrowing as it has a low debt-equity ratio of 0.43. The EPS has increased to Rs 5.16 in March 2021 from Rs 0.28 in March 2020, the highest in the last five quarters.
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“Minda Inds’ growth has been outpacing the industry growth on account of an increase in kit value per vehicle in both 2W/4W segments through the introduction of new products both on the mechanical and technology sides. We retain a BUY and value the company at 32x FY23E to arrive at a target price of Rs 724 per share,” Axis Securities said.
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Minda Industries posted a net profit of Rs 140.32 crore for the quarter ended March 2021 as against a net profit of Rs 7.30 crore in March 2020. Net Sales stood at Rs 2,238.27 crore in March 2021 compared to Rs 1,338.97 crore in March 2020.
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Recently, the company announced it will acquire of 51% stake in automotive lighting manufacture UZ Chasys LLC (UZ Chasys) in Uzbekistan.
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“The company has won a bid to acquire of 51% stake in leading automotive lighting manufacture UZ Chasys LLC (UZ Chasys) in Uzbekistan for a purchase consideration of 83.1 billion Kyrgyzstani Soms(equivalent to Rs 58 crore),” Minda Industries said.
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“The acquisition of UzChasys may not lead to a material change in the company’s numbers and view but can lead to some strategic benefits like cross-selling export opportunities for Minda Inds’ India business. The management is confident of Rs 300-400 crore over the next couple of years and it does have a good track record of integrating acquisitions,” Axis Securities noted.
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The plant is expected to commence operations by the quarter ending March 2022 and will stabilise in a subsequent couple of quarters. The company currently has manufacturing facilities at Pune, Chennai, and Manesar, which are operating at near capacity.
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