Minda Industries rallies 9% post Q4 results and 1:1 bonus issue

Shares of Minda Industries rallied 9 per cent to Rs 906.45 on the BSE in Wednesday’s intra-day trade after the company recommended issue of bonus shares in the ratio of 1:1 i.e. one bonus share for every one share held.

The company has fixed June 10, 2022 as the record date for the purpose of determining the eligibility of shareholders or beneficial owners, who shall be entitled to receive the bonus shares.

Meanwhile, for January-March quarter (Q4FY22), Minda Industries posted a healthy performance as consolidated revenue jumped 10.7 per cent quarter on quarter (QoQ) to Rs 2,415 crore and consolidated profit after tax (PAT) was up 42.5 per cent QoQ at Rs 144 crore, supported by higher other income and profit from associates.

Besides that, earnings before interest, taxes, depreciation, and amortization (EBITDA) was up 17 per cent QoQ at Rs 275.5 crore, with corresponding EBITDA margins at 11.4 per cent, up 60 basis points (bps) QoQ.

However, on year on year basis, EBITDA was down 9 per cent, while margins contracted by 207 bps from 13.5 per cent in Q4FY21. "The rising input costs continue to have impact on profitability and margin of the business, however, the margins have shown a visible improvement vis-à-vis last quarter, i.e. Q3FY22," the company said.

Despite turbulent times for the auto industry due to semi-conductor shortage and rising input costs, the company was able to register growth in revenue and profitability. The management believes that the auto industry is at the cusp of revival, with favorable governmental policies and more new product launches planned by OEMs for the coming year.

That apart, analysts at ICICI Securities believe that the company is poised for a good run in the long haul due to new product profile.

"Minda Industries closed the year end on a positive note with highest ever quarterly revenues and recovery of margin profile. Margin performance for the quarter came in as a surprise with gross margin expanding ~20 bps QoQ and substantial savings realised under other expenses which were down ~60 bps on QoQ basis. It is exceeding expectations in the seating & alloy wheels business segments and is also gaining traction with EV OEMs for its existing as well as new product profile as well as penetrating well within existing EV OEMs," the brokerage firm said.

Meanwhile, the Board approved to change the name of the company from "Minda Industries Limited" to "UNO Minda Limited" subject to shareholders and necessary regulatory or statutory approvals.

Despite of today’s rally, in the past three months, the stock has underperformed market by falling 8 per cent as compared to 3 per cent decline in the S&P BSE Sensex. Earlier, it had hit a 52-week high of Rs 1,260 that it had touched on December 29, 2021.