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Equirus
Minda Ind (Buy)
CMP: ₹1,088.35
Target: ₹1,240
Minda Industries delivered yet another strong quarter driven by strong growth in alloy wheels, standalone lighting, horns and batteries. We believe Minda is an excellent long-term play on premiumisation and increasing safety content in vehicles given its futuristic product portfolio. We forecast 21 per cent EPS CAGR over FY18-FY20E with an upward bias as group company in airbags, TG Minda, would be integrated with Minda over the next few months. Products such as alloy wheels, reverse parking systems and infotainment systems still have low penetration in India, and a combination of safety regulations and customer preferences will drive their demand over the next few years.
We raise FY19E EPS by 5 per cent assuming higher margins, and maintain ADD on the stock with a March 2019 target price of ₹1,240 set at 34x March 2019 EPS (December 2018 target price of ₹1,116 at 32x earlier).
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