Auto ancillary maker UNO Minda eyes 1.5x faster growth than industry average over medium term

Bohra also outlined the company's strategy and outlook for the different segments. He is confident about a multi-fold growth in the lighting business over the next 4-5 years with market share expansion to 18-20% from 14-15% now. This will be aided by the shift toward LED products from halogen.

The quarterly revenue run-rate for the segment is also expected to rise to ₹1,000 crore in the next financial year (FY25) from around ₹850 crore now.  The lighting segment currently contributes roughly 24% to the revenue.

Of the other segments, switches contribute roughly 26%, castings are at 20%, and seating at 8% of revenue.   

For the third quarter of FY24, UNO Minda reported consolidated revenue increase of 21% year-on-year (YoY) to ₹3,523 crore from ₹2,915 crore. The earnings before interest, tax, depreciation, and amortisation (EBITDA) grew 12% YoY to ₹380 crore from ₹338 crore. However, the operating profit margin declined from 11.6% to 10.8%. The profit after tax was up 19% to ₹193 crore from ₹162 crore.

The company secured new orders with an annual peak revenue totaling ₹250 crore from electric vehicle (EV) industry. These significant orders encompass off-board chargers from three-wheeler OEMs and EV motor orders from two new age EV OEMs.

| UNO Minda forecasts volume ramp-up, product expansion in next 12-18 months

UNO Minda currently supplies parts for only two-wheelers and three-wheelers in the EV space. Bohra said the company is still making a strategy to expand this to the passenger vehicle segment since there is still some uncertainty in the segment as of now and volumes are limited.

The company's sales to the two-wheeler EV segment has been rising gradually every quarter. In Q3FY24, the sales were at ₹164 crore compared to ₹67 crore in the same quarter last year.

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In the seating segment, Bohra said, the plan is to achieve the ₹1,500 crore revenue target before the projected five-year timeline that concludes in FY26.

"There has been some softening in exports volume...if everything goes well, definitely, we are looking at maybe hitting that target six months before our committed timeline," he said.

UNO Minda's stock has gained more than 32% over the past year. The company has a market capitalisation of ₹38,534.61 crore.

Brokerage firm Nomura has a 'buy' rating on the stock with a target price of ₹820 apiece. The brokerage firm expects premiumisation, market share expansion, and EV ramp-up to drive robust growth.

Another broking firm, Macquarie, though has a 'neutral' stance on the stock, with a target price of ₹679.

For the entire interview, watch the accompanying video