Minda Corp INITIATING COVERAGE By Kotak Institutional Equities Research

We initiate coverage on Minda Corporation with a BUY rating and target price of ₹110 based on 15X September 2017E EPS. We expect Minda to deliver 25% earnings CAGR over FY2016-20E led by (1) market share gains across both wiring harness and locksets businesses and (2) new product development for existing customers. The company’s return ratios are likely to improve over the next three years. Valuations are relatively inexpensive at 14.3X FY2017E EPS given decent growth prospects and improvement in RoE.

Minda Corporation is one of the leading suppliers of locksets, wiring harness and instrument clusters in the Indian automotive market. Our positive view on the stock is underpinned by (1) Minda’s technology tie-ups with global suppliers that give it access to MNC OEMs, (2) its ability to gain market share across segments and (3) robust growth potential from new products such as steering roll connectors and sensors. We expect 25% EPS CAGR over FY2016-20E and initiate coverage with a BUY rating; our TP of `110 is based on 15X September 2017E EPS.

Click here to download research report