Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Minda Corp Ltd (BOM:538962, Financial) achieved its highest ever quarterly revenue of INR1,290 crores, marking an 8% year-on-year increase.
- The company reported its highest ever EBITA in value terms at INR147 crores with an EBITA margin of 11.4%.
- Lifetime order wins in Q2 FY25 surpassed INR2,400 crores, contributing to an order book exceeding INR4,750 crores.
- Minda Corp Ltd is expanding its product portfolio and demand for IC and EV products, with plans for four new facilities.
- The company signed a technological license agreement with SENCO, enhancing its wiring harness portfolio for the EV segment.
Negative Points
- The passenger vehicle segment experienced a slight decline due to softer market demand.
- The commercial vehicle segment faced challenges due to prolonged monsoon delays and adverse weather conditions.
- Export demand from the European market was subdued, impacting overall performance.
- The ASEAN markets experienced a slowdown, affecting the company's export growth.
- Despite growth in domestic revenue, export revenues have been flat year-on-year, with no significant uptake expected in the next six months.
Q & A Highlights
Q: How does the partnership with SENCO open new revenue opportunities and aid localization efforts?
A: The partnership with SENCO allows Minda Corp to integrate high-voltage connectors and other products into its offerings, enhancing competitiveness and localization. This collaboration is expected to increase business potential significantly, with immediate market opportunities valued at over INR1,000 crores. (Prateek Ladha, Equity Research Associate)
Q: What is the progress on the new plant for Sunroof Closure Systems in Pune?
A: The plant is on track to be commissioned in FY '26, with discussions ongoing with customers for upcoming models. The facility setup is progressing as planned, with potential minor delays. (Prateek Ladha, Equity Research Associate)
Q: How is Minda Corp positioned to grow amidst a challenging auto industry environment?
A: Minda Corp is focusing on product premiumization, expanding capacities, and leveraging export opportunities. The company is committed to quality revenue and product mix, aiming for sustainable growth and a 12% margin target. (Prateek Ladha, Equity Research Associate)
Q: What are the expectations for export growth, given the current challenges?
A: While exports have stabilized, significant growth is not expected in the next six months due to macroeconomic factors. However, Minda Corp aims to increase export contributions to 10-15% in the mid to long term. (Prateek Ladha, Equity Research Associate)
Q: How does Minda Corp plan to maintain its ROC while exploring inorganic growth opportunities?
A: Minda Corp adheres to strict financial prudence, ensuring any capital allocation, including inorganic growth, does not dilute its ROC, which is targeted to remain above 20%. (Vinod Raheja, Chief Financial Officer)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
