The shares of the leading manufacturer and supplier of automotive solutions gained up to 1 percent after a well-known brokerage suggested a ‘buy’ recommendation.
With a market capitalization of Rs 36,385.04 crore, the shares of UNO Minda Ltd were trading at Rs 632.35 per share, increasing around 0.17 percent as compared to the previous closing of Rs 631.25 apiece.
Looking into UNO Minda’s performance, revenue increased by 21 percent from Rs 2,915 crore in Q3FY23 to Rs 3,523 crore in Q3 FY24. During the same period, net profit increased by 18 percent, from Rs 174 crore to Rs 205 crore.
Geojit BNP Paribas, one of the well-known brokerages in India, gave a ‘Buy’ call on the automotive stock with a target price of Rs 792 apiece indicating a potential upside of 25 percent from Wednesday’s price of Rs 633.15 per share.
Here’s the rationale for the potential upward target:
● The content per vehicle has continued to rise at a rate of 10% to 15%, and more components are likely to be added to the product line. The yearly order value from EV OEM is Rs. 3,292 crore.
● Q3FY24 sales exceeded expectations, increasing by 26% YoY. This growth was driven by new customer acquisitions in the 2- and 4-wheeler segments, as well as new content and client base leveraging.
● UML has a healthy Capex plan of Rs. 750 crore for FY24. Increased orders in the 4W lighting market from Indian and Japanese OEMs. the company received an order for a 2W switch and heated handle grip from an American marque vehicle company.
● The revenue from other segments has grown by 47%YoY in the last 9 months. Within this controller and sensors was around Rs.230 cr. and was expected to cross Rs. 800cr. for the full year.
● The top line was fueled by growth across all categories, in which core businesses like switches, lighting, and acoustics rose by 14%, 32%, and 8%, YoY, and new companies like LMT, seating, and other businesses grew by 18%, 4%, and 36%, respectively.
The company’s new orders from EV OEMs generate an annual peak revenue of around Rs 250 crores. The Rs 200 crore investment is for EV-specific components like as off-board chargers, motors, and controllers.
Uno Minda Limited is an India-based global manufacturer and provider of patented automotive solutions and systems to original equipment manufacturers (tier-1). The company’s product categories include switches, sensors, controllers, lights, acoustics, alloy wheels, seats, aftermarket, casting, and ADAS.
Written by:- Abhishek Singh
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