Steady margin performance
Exports subdued; domestic sales up 20% YoY
Minda Corporation (MDA IN) Q4 revenue rose 13% YoY and 4% QoQ to ~INR 12.2bn, slightly higher than our estimates. Q4 EBITDA margin rose 30bp QoQ to 11.4% due to continued efforts to pare down cost via automation and local sourcing. EBITDA grew 18.5% YoY and 6.7% QoQ, driven by operational efficiency. 2W revenue rose 21% YoY for MDA; however, it was lower than industry production growth YoY, owing to weakness in exports. PV revenue was up 13% YoY, ahead of production growth. Domestic revenue grew ~20% YoY while exports dragged.
MDA wins lifetime orders of INR 20bn in Q4 and INR 100bn in FY24
In Q4, MDA secured orders worth INR 20bn, with EV forming >30% of orders won. Key order wins were in smart keys, die casting, clusters, and DC-DC converters. It secured lifetime order wins of >INR 100bn in FY24. Management is optimistic on the smart key segment (>80% market share), driven by rising penetration from the current 3-5% to 20%+ by FY30, which will be led by better content per vehicle and facilitating better margin than mechanical locksets. The sunroof plant is set to be commissioned by Q3FY25, and MDA is in talks with several customers.
Valuation: reiterate Accumulate with a higher TP of INR 482
With a first-mover advantage in EV products, MDA supplies to major EV 2W firms. Its smart key solution is being adopted by ICE 2W OEM, a key positive in hiking content per vehicle with realization for smart key at INR 2,500+ vs INR 400-600 for traditional locksets. A localization rise in wiring harness and execution of new orders may expand margin. We expect a revenue CAGR of 15% during FY24-26E, ahead of 2W industry volume CAGR of 9% and an EBITDA CAGR of 22% during the same period. Entering into new high-growth products (sun-roof) may prop up valuation. We are closely monitoring exports growth where management has been cautious, however order wins will facilitate above industry average growth. We reiterate Accumulate with a TP of INR 482 from INR 460 based on 26x (from 24x) FY26E P/E as we roll forward to June 2026E
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