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SENSEX: 33679.24 91.16

NIFTY: 10389.70 40.95

Multi Baggers

Hem Securities

12.00 AM Dec 30th 2015

Minda Corp

BSE ID : 538962     NSE ID : MINDACORP

RECOMMENDED PRICE 89.40

PEAK FROM RECO 210.65 135.63%

CURRENT PRICE 196.70 120.02%

Minda Corporation is a diversified company with a product portfolio encompassing from Mechanical and Electronic Security System, Electronic Controllers for Electric Vehicles and for Auto OEM's across the Globe. We initiate a 'BUY' on the stock with a target price of Rs 120 with the medium to long term investment horizon.

Minda Corporation

Minda Corporation Ltd. is a leading automotive component company. It has a diversified product portfolio that encompasses Safety, Security & Restraint Systems; Driver Information & Telematics Systems and Interior Systems for auto OEMs. These products cater to 2/3 wheelers, passenger vehicles, commercial vehicles and after-market.

The company has registered decent results for the quarter ending September 2015. The consolidated revenues grew by 27.16% to Rs.616.22 crores vs. Rs.484.59 cr. in the year ago quarter while it grew ~17% q-o-q. The growth was due to the combined effect of new products that started during the year and of increase in the share of business of few of the existing customers. Operating profit too grew sharply by 29% at Rs.58.56 crores as against Rs.45.43 crores in the preceding quarter while it climbed 24% on a q-o-q basis. The company's continued focus on value added products coupled with the ongoing cost optimization initiatives helped the profits. The adjusted net profit surged at Rs.23.04 crore as against Rs.21.73 crore; registering growth of mere 6% on a y-o-y basis while it surged by 30% as compared to like quarter last year mainly attributed to lower interest outgo. Interest expense decreased on account of better cash management, lower working capital requirements and repayment of term loan.

Minda Corporation achieved a higher growth on the back of new business and strong performance by Wiring Harness, After Market & Die Casting operations.

Valuation

New product launches through technological advances and developments, client addition, increasing penetration in new territories, operational efficiency, capacity expansion and improving financial metrics bodes well for the company growth going forward. We believe the company is trading at an attractive valuation at 16.87x and 11.49x of FY16EPS of Rs.5.30 and FY17EPS of Rs.7.78. We initiate a 'BUY' on the stock with a target price of Rs 120 (appreciation of about 34%) with the medium to long term investment horizon.

For full details, Click on the attachment.

 

Disclosure of Interest Statement - Company Name

1. Analyst Ownership of the Stock - No

2. Hem & its Group Company Ownership of the Stock - No

3. Hem & its Group Companies' Director Ownership of the Stock - No

4. Broking relationship with company covered - No

Disclaimer & Disclosure: This document is prepared for our clients only, on the basis of publicly available information and other sources believed to be reliable. Whilst we are not soliciting any action based on this information, all care has been taken to ensure that the facts are accurate, fair and reasonable. This information is not intended as an offer or solicitation for the purchase or sell of any financial instrument and at any point should not be considered as an investment advise. Reader is requested to rely on his own decision and may take independent professional advise before investing. Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited, Directors and any of its employees shall not be responsible for the content. The person accessing this information specifically agrees to exempt Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and further agrees to hold Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. The companies and its affiliates, officers, directors, and employees, including persons involved in the preparation or issuance of this material may from time to time, have long or short positions in, and buy or sell the securities there of, company (ies) mentioned here in and the same have acted upon or used the information prior to, or immediately following the publication. Analyst Certification: The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.

MindaCorp_PYT_HemSec.pdf

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