Axis Securities

Minda Ind (Hold)

Target: ₹1,000

CMP: ₹1,047.05

Strengthening Foothold in the EV segment, Minda Industries Ltd has announced new investments for EV products and expansion of alloy wheel capacity (both PV and 2W alloy wheels) in line with its growth plans. To meet these objectives, the company plans to form a joint ventrue in India with FRIWO AG (German manufacturer of power supply units and e-drive solutions) for EV products.

MIL will invest ₹71 crore in the joint venture over the next 3 years for a 50.1 per cent stake and €15 million in FRIWO AG, Germany for a 5.24 per cent stake (all 2W and 3W electric products to be housed under the JV moving forward).

The company will incur a capex of ₹190 crore for the second phase of the 2W alloy wheel plant which will increase its capacity from 3.6 million wheels per annum to 5.6 million wheels by FY23 end. The company will also incur a capex of ₹74 crore at Minda Kosei’s Gujarat plant (PV Alloy wheels) to increase its capacity from 60k wheels/month to 90k wheels/month by Q1FY24 end.

Furthermore, it has entered into a technology license agreement (TLA) with Dhama Innovations for temperature-controlled automotive seats. Given its success in developing import substitution products, the company is well-placed to capture the business opportunities in the Auto sector.