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Our Rating: OBSERVE & HOLD
Mehabe score: 4 G Factor: 5 Piotski Score: 4 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 5 and Piotski score of 4.
Description
Minda Industries Limited, the flagship company of the N.K. Minda Group is one of the most diversified auto component manufacturers in India. It is a technology leader in the auto components industry and a leading tier-1 supplier of proprietary automotive solutions to OEMs. The Group is headquartered in Manesar, Haryana. It has engineering, research, and development centers in Manesar, Pune & Sonepat.
Main Points
Market Leadership
The company is the largest Switch Player in India. It’s the largest player in India and second-largest globally in horn segment #
It is the third-largest Automotive Lighting player in India. #
It has a partnership with 14 Global technology players #Site:MINDAIND
Market Cap:
Rs 16,656 cr
Price:
612.0
Trading pe:
81.0x
Book-value:
66.8/share
Div yield:
0.07 %
Earning yield:
1.44%
Face-value:
2.00/share
52week high:
628.50
52week low:
264.66
Technical Analysis
Stock trades at 612.0, above its 50dma 555.21. It also trades above its 200dma 470.42. The stock remains bullish on techicals
The 52 week high is at 628.50 and the 52week low is at 264.66
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
-‘s median sales growth is 23.58% of last 10 years
Weakness
– Stock is trading at 9.17 times its book value
– has a low return on equity of 12.64% for last 3 years.
– might be capitalizing the interest cost
-Dividend payout has been low at 5.62% of profits over last 3 years
Competition
– The industry trades at a mean P/E of 32.9x. WABCO India trades at the industry’s max P/E of 125.62x. MINDAIND trades at a P/E of 81.0x
– Industry’s mean G-Factor is 4.1 while the mean Piotski score is 7.0. MINDAIND has a G-Factor of 5 and Piotski scoreof 4.
– Average 1 month return for industry is 9.1%. The max 1- month return was given by Minda Industries: a return of 19.97 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 2238.0 cr compared to Rs 1498.0 cr for period ended Mar 2020, a rise of 49.4%
Operating Profits reported at Rs 302.0 cr for period ended Mar 2021 vis-vis 140.0 for period ended Mar 2020 .
Operating Margins expanded 414.8 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 5.16 compared to Rs 4.24 for previous quarter ended Dec 2020 and Rs 0.48 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 6374.0 cr for period ended Mar 2021 vis-vis sales of Rs 5465.0 cr for the period ended Mar 2020, a healthy growth of 14.3%. The 3 year sales cagr stood at 12.5%.
Net Profit reported at Rs 207.0 cr for period ended Mar 2021 vis-vis sales of Rs 155.0 cr for the period ended Mar 2020, rising 25.1%.
Company reported a poor Net Profit CAGR of -12.6% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 11.0% compared to 13.0% over the last 3 Years. – The stock has given a return of 113% on a 1 Year basis vis-vis a return of 12% over the last 3 Years. – The compounded sales growth on a TTM bassis is 17% vis-vis a compounded sales growth of 13% over the last 3 Years. – The compounded profit growth on a TTM basis is 30% vis-vis a compounded profit growth of -10% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 9.6% vis-vis 9.61% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 9.03% vis-vis 9.27% for Dec 2020
Conclusion
– is expected to give good quarter
-‘s median sales growth is 23.58% of last 10 years – Stock is trading at 9.17 times its book value
– has a low return on equity of 12.64% for last 3 years.
– might be capitalizing the interest cost
-Dividend payout has been low at 5.62% of profits over last 3 years
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 555.21 and is trading at 612.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
