Buy this Multibagger Auto auxiliary stock for a target price of Rs 315: ICICI Securities


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oi-Vipul Das

Posted: Friday April 22nd 2022, 04:33 PM [IST]

Minda Corporation Ltd (MCL) is a key player in the international automotive industry and a leading supplier of OEM auto parts. With operations in Indonesia, Vietnam, Uzbekistan, the United States of America and Japan, the company now caters to major passenger vehicles, commercial vehicles, motorcycles and scooters, off-road vehicles and Tier 1 companies in India. The company’s shares on the NSE fell from Rs 96 to the current market price of Rs 270 in one year, representing a multibagger yield of 180.81%. However, the stock is up 36.50% year-to-date (YTD), while the stock is up 110.86% in the previous six months. Over the previous month, the stock has gained 37.20% and over the past five days it has climbed 19.81%. ICICI Securities issued a call to buy the stock with a target price of Rs 315 over the next 12 months.


  • Gradually stepping up the game in the EV space with new product development in-house. Potential value of 2-W electric kit seen at Rs 16,000-20,000/unit compared to current value of 2-W ICE kit at Rs 4,000-4,500/unit.
  • Envisaged increase in kit value through increased content of existing products as well as new product offerings. On-board car manufacturers like Ola Electric (sole smart key supplier), Hero Electric, Ampere, among others.
  • History of core OEM industry growth in the past with an additional commitment to grow 10-15% ahead of industry volumes in the future.


  • Strong orders (~Rs 4,232 crore lifetime orders for 9MFY22; replacement and new business combined; VE order at Rs 843 crore) provide good revenue visibility. We are creating a CAGR of 23.8% of FY21-24E consolidated sales.
  • Strong EV backlog with two new EV OEMs (Hero Electric and BMW) added to the list marking all the big names in the EV space as customers.
  • The acquisition of JV’s stake in Stoneridge (for Rs 161 crore) will be accretive to margin and yield ratios. Consequent consolidated RoE, RoCE seen at 17-19% by FY24E. EBITDA margins are expected to improve to 12.2% by FY24E.


ICICI Securities said “MCL was one of our first finds with a share price nearly 3x since our launch in December 2020, significantly outperforming the Nifty Auto Index. We retain the Buy rating in healthy growth prospects, going forward. MCL value at a revised target price of Rs 315, i.e. 25x P/E on FY24E EPS of (previous TP Rs 220).”

A slower-than-expected recovery in industry volumes and a slower-than-expected improvement in margins are the main risks for the stock according to the brokerage.


The security was selected in the brokerage report of ICICI Securities. Investing in stocks presents a risk of financial loss. Investors should therefore exercise caution. Greynium Information Technologies, the author, and the brokerage are not responsible for any losses caused as a result of decisions based on the article.

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Article first published: Friday, April 22, 2022, 4:33 p.m. [IST]