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Buy Minda Corporation; target of Rs 173: KR Choksey

May 15
16:25 2019

KR Choksey’s research report on Minda Corporation

Incorporated in 1985, Minda Corporation Ltd. (MCL) is the flagship company of Spark Minda, Ashok Minda Group, the erstwhile Minda Group. One of the leading automotive component manufacturing companies, it has pan-India and international presence. The company operates through three business verticals – Safety, Security & Restraint, Driver Information & Telematics and Interior Plastics for auto OEMs. Their products cater to 2/3 wheelers, passenger vehicles, commercial vehicles and after market. It has 34 manufacturing facilities in India (28 plants & two offices) & South-East Asia (2 plants & one representative office in Japan), Europe. (3 plants) & North America (1 plant). MCL has a diversified product portfolio and global customer base.

Outlook

We assign a P/E multiple of 19x to the FY20 estimated EPS of INR 9.10 to arrive at a target price of INR 173. Currently it trades at a fair valuation and with the present price correction of 30% from Jan, 2019 offers a good entry point. We recommend a ‘BUY’ on the stock.

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