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Minda Corporation Ltd

| Q2 and H1 FY26 Earnings Conference Call

BULLISH SENTIMENT

Report Source

⬤6th Nov 25

Summary : Minda Corporation reported record Q2 FY26 revenue and EBITDA, driven by strong auto demand and new EV/premium product wins, with ambitious growth targets and strategic investments for 2030.

Management Perspective positive : The company maintained its strong growth momentum this quarter, surpassing consensus estimates, achieving its highest ever quarterly revenue. We are and remain highly confident in our growth trajectory, driven by strategic investments and an unwavering commitment to advancing our products and technologies.

Concall Report Analysis & Insights

Business Overview

  1. Achieved highest ever quarterly revenue of Rs. 1,535 crore, up 19% Y-o-Y.
  2. Reported highest ever EBITDA of Rs. 178 crore, with 11.6% margin, up 21.4% Y-o-Y.
  3. PAT grew 14% Y-o-Y to Rs. 85 crore, driven by operational efficiencies.
  4. Outperformed industry trends in wiring harness and instrument cluster divisions.
  5. Flash Electronics, an associate company, reported Rs. 446 crore revenue with 16.1% EBITDA margin.

Future Growth Prospects

  1. Secured first sunroof order from a leading OEM, production starting Q1 FY27.
  2. Won high-voltage EV wiring harness order from a major EV manufacturer.
  3. Received significant orders for TFT clusters and switches from leading OEMs.
  4. Targeting 25-30% revenue from passenger vehicles by 2030, up from 15%.
  5. Investing Rs. 2,000 crore over 4.5-5 years in manufacturing and R&D.

Management Insights

  1. The auto sector shows positive trajectory with favorable macros and improved sentiment.
  2. Government's Make in India focus drives localization and self-resilience.
  3. Company maintained strong growth momentum, surpassing consensus estimates.
  4. Strategic priorities include system solution offerings, customer relationships, and new technologies.
  5. Committed to expanding EV market presence, R&D, and strategic partnerships.

Signs of Skepticism

  1. Management stated rare earth magnet issue for Flash is 'relatively solved' for Q3-Q4, but also mentioned significant spending on solutions.
  2. New die casting facilities will have low utilization at the beginning, relying on future order wins.
  3. Export business underperforming due to recreational vehicle slowdown, despite continued focus.

Risk Factors

  1. Recreational vehicle slowdown in Europe and America impacting Mechatronics exports.
  2. Challenges from Chinese markets in Europe due to cost competitiveness.
  3. Initial low utilization for new die casting plants at SOP.

Good To Know

  1. Filed 315 patents to date, with 143 already granted.
  2. Net debt is Rs. 1,165 crore, with a net debt-to-equity ratio of 0.5.
  3. R&D expenditure is around 3.5% to 4% of revenue, with future capex expected to decrease.
  4. Flash Electronics is developing ferrite and magnet-less motors to address rare earth issues.
  5. Company aims for greater than 12.5% EBITDA margin across all business verticals by 2030.

Key Drivers

  1. New EV product orders secured.
  2. Sunroof business launch in FY27.
  3. Strong Q2 financial results.
  4. Increased PV market share.

Key Analyst Discussions

Competitive Environment

  1. Market share in 2-wheeler, CV, and off-road wiring harness is north of 30%.
  2. Passenger vehicle market share in clusters is currently in single digits.
  3. Leveraging cost competitiveness and technology for market share in Europe and America.

Market Trends & Consumer Behavior

  1. Smart key penetration in 2-wheelers is 3-5%, targeting 25-30% by 2030.
  2. EV contribution to Flash Electronics' revenue is about 23-24%.

Financial Highlights

  1. Management targets greater than 12.5% EBITDA margin across all segments.
  2. Revenue guidance for FY26 and FY27 is 20% to 25% Y-o-Y growth.
  3. Sunroof investment of Rs. 63 crore targets 81,000 units capacity, 60% utilized by FY28.

Product Composition

  1. Die casting revenue: 10-15% captive, 40-45% exports.
  2. PV products, including wiring harness and TFT clusters, expected to have blended margins.
  3. New die casting plants will add large tonnage machines for high-EV and 4-wheeler components.

Strategic Considerations

  1. First breakthrough in high-voltage PV wiring harness from an international OEM in India.
  2. Flash and Minda are moving towards complete system solutions for EV powertrain products.
  3. Company is open to partnerships for inorganic expansion in instrument cluster business.