Key Highlights for the quarter: Valuation and Recommendation: A. PAT (Rs. Cr)

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1 r Rcommndation BUY CMP Rs. 153 Targt Pric Rs. 220 Sctor Stock Dtails Auto Parts & Equipmnts BSE Cod NSE Cod Bloombrg Cod MINDACORP MDA IN Markt Cap (Rs. Cr) 3,499 Fr Float (%) 30% 52 wk High/Low (Rs.) 229/99 Avg. volum (BSE+NSE) Fac Valu (Rs.) 2 Dividnd (FY18) 30% Shars o/s (Crs) Rlativ Prformanc 1Mth 3Mth 1Yr Minda Corp -2% -16% 51% Rl. to Snsx -8% -24% 31% Aug-17 N-17 Fb-18 May-18 Aug-18 Sharholding Pattrn 30 th Jun 2018 Promotrs Holding 64.7% Institutional (Incl. FII) 12.6% Public & othrs 22.7% Sunil Jain ( ) Had of Rsarch sunil.jain@nirmalbang.com Mixd b Rvnu growth robust; margins disappoint Rvnu from oprations for th company grw by 34% YoY to Rs. 778 Cr vs Rs. 582 Cr in Q1FY18 and Rs. 721 Cr in Q4FY18 (up 8%). EBITDA stood at Rs Cr as ainst Rs Cr sam tim last yar (growth of 65%) and Rs Cr squntially. MCL witnssd 180 bps EBITDA margin xpansion YoY at 9.4% for th quartr, howvr it dclind by 200 bps on squntial basis on th back of a stp incras in raw matrial costs. Nt profit cam at Rs Cr vs Rs Cr sam tim last yar, growth of 53%. Ky Highlights for th quartr: Robust toplin growth of 34% was ld by growth across all major subsidiaris. Rvnu mix was as follows during th quartr - Safty, Scurity & Rstraint at 42% mix (+32% YoY), Drivr Info & Tlmatics at 31% mix (+32% YoY) and Intrior systms at 27% mix (+42% YoY). Gross margins dclind by 190 bps YoY and 270 bps QoQ to 36.9% on th back of a stp incras in raw matrial costs. Gross margins shall continu to b undr prssur in th nar trm as th company will b abl to pass on th cost incrass with a l ffct and in som cass will hav to absorb itslf. EBITDA Margins xpandd by 180 bps YoY to 9.4%, howvr it dclind by 200 bps on squntial basis from 11.4%. Dprciation and intrst costs incrasd by 30% and 45% YoY rspctivly du to xpansion plans implmntd. Th quartr s profits grw by 53% to Rs Cr from Rs Cr YoY. Valuation and Rcommndation: MCL has a divrsifid product bas and strong clintl. Th manmnt has takn stps to impr profitability by ngotiating raw matrial prics, undrtakn cost rationalization masurs and impring product mix with focus on high yild products. W xpct MCL s top lin to grow at a CAGR of 24% r FY18-FY20E ld by (i) organic and inorganic xpansion, (ii) strong rlationships with OEMs, (iii) opportunitis in snsors, ABS and wiring harnss on th back of BS6 implmntation and (iv) focus on xports. With bttr capacity utilization, bnfit of oprating lvr and implmntation of BS6, w xpct EBIDTA margins to inch upwards to 11.3% in FY20E from 10.5% in FY18 and 9.2% in FY17 thus translating to arnings growth of 32% CAGR r FY18-20E. At CMP of Rs. 153, MCL is trading at a PE of 14.1x FY20E arnings. W rcommnd BUY on th stock for a targt pric of Rs. 220 (20x FY20E). Yar Nt Sals (Rs. Cr) Growth (%) EBIDTA (Rs. Cr) EBIDTAM (%) A. PAT (Rs. Cr) Growth (%) Dilutd EPS (Rs.) P/E (x) EV/EBITDA (x) Adj. ROE (%) FY % % % % FY % % % % FY19E % % % % FY20E % % % % 1 P a g

2 r Exhibit 1: Rvnu mix by sgmnt 16% 14% 21% 27% 45% 47% 32% 31% 39% 39% 47% 42% Exhibit 2: Ordr-book mix by gography 5% 4% 6% 4% 16% 14% 26% 29% 79% 82% 69% 67% FY16 FY17 FY18 Q1FY19 Safty,Scurity and Rstraint Systm Drivr Information and Tlmatics Systms Intrior Systms Sourc: Company data, NBRR Exhibit 3: Rvnu mix by sgmnts FY16 FY17 FY18 Q1FY19 India Europ & NA South East Aisa Sourc: Company data, NBRR Exhibit 4: Rvnu growth and EBITDA margins 9% 10% 12% 8% 38% 36% 19% 25% 20% 23% 33% 30% 33% 31% 37% 37% 50% 40% 30% 20% 10% 14.0% 40% 34% 12.0% 11.5% 11.3% 11.4% 25% 10.0% 18% 19% 20% 9.4% 7.4% 7.6% 8.0% 6.0% FY16 FY17 FY18 Q1FY19 2/3 Whlrs Commrcial Vhicls Passngr Vhicls Aftr Markt 0% Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Sals Growth EBITDA Margin 4.0% Sourc: Company data, NBRR Sourc: Company data, NBRR Confrnc Call Highlights Among all th sgmnts prforming wll during th currnt quartr, th ons worth mntioning includ th Mxico plant for intrior plastic systms and th dicast plant at Pun. Th Mxico plant has a pak rvnu potntial of $20 mn whil th dicast plant at Pun can achiv Rs. 200 Cr. MCL is confidnt of growing ab industry growth rats. Howvr, manmnt blivs Q1FY19 rvnu growth of 34% is on th back of a lowr bas of Q1FY18 which was impactd by GST. Growth in futur quartrs should trnd lowr. 2 P a g

3 r A major growth triggr for MCL will b th implmntation of BS6 in Q4FY20. W bliv thr ar four major growth drivrs for MCL in coming yars: (i) Two Whlr snsors to b addrssd through Minda-Stonridg JV, (ii) Wiring harnss ralizations ar xpctd to incras from Rs. 400 currntly to Rs post BS6 implmntation. (Manufacturd by Minda Sai), (iii) Exports to incras to Rs. 500 Cr by FY20E from Rs. 275 Cr in FY18 (wr Rs. 170 Cr in FY17), (iv) Acquisitions, for which th company has alrady raisd Rs. 310 Cr via QIP in May Gross dbt stood at Rs. 723 Cr as on Jun 2018 and is xpctd to hav risn by 10% till dat. Top four clints of th company includ Bajaj, M&M, Maruti and Volks Won. Non of ths individually contribut mor than 12% to th rvnus. Quartrly Financials Snapshot Particulars (Rs. Cr) Q1FY19 Q1FY18 YoY Q4FY18 QoQ Robust toplin growth ld by all major businsss: Rvnu % 721 8% - Safty, Scurity & Rstraint +32% COGS As % of sals % % 38% 190 bps % 13% 270 bps - Drivr Info & Tlmatics +32% - Intrior systms +42% Employ Cost % 117 6% As % of sals 15.9% 17.9% (200) bps 16.3% (40) bps Othr Expnss % 86 5% As % of sals 11.6% 13.3% (170) bps 12.0% (40) bps EBITDA % % Margin 9.4% 7.6% 180 bps 11.4% (200) bps Dprciation % 20 7% Othr incom % 9-47% Intrst % 11 4% Excptional Itms PBT % 60-24% Prision for Tax % 17-24% Tax rat 29% 26% 28% PAT % % Profit shar from JV % (4.7) -205% Cons. PAT % % Adj. EPS % % Sourc: Company Data, Nirmal Bang Rsarch Inability to pass on th incras in raw matrial costs has impactd gross margins. Bttr capacity utilization and oprating lvr ld to a 180 bps xpansion in EBIDTA margins on YoY basis. Though, squntially margin prssur is quit vidnt from th 200 bps dclin from 11.4% to 9.4% Expansion plans carrid out in th last yar and an incras in working capital hav ld to highr dprciation and intrst costs rspctivly Profit growth was thus marginally lowr than EBITDA growth at 53% 3 P a g

4 r Financials P&L (Rs. Cr) FY17 FY18 FY19E FY20E Balanc Sht (Rs. Cr) FY17 FY18 FY19E FY20E Rvnus Shar Capital % Growth 21% 25.9% 26.8% 21.5% Rsrv & Surplus ,037 1,272 Oprating Expns Ntworth ,082 1,317 EBITDA Minoirty Intrst EBITDA Margin 9.2% 10.5% 10.6% 11.3% Long trm Borrowings Dprciation Long trm Liabilitis Othr Incom Long trm Prision Intrst Total Non-Currnt Liab Excptional Itms Short trm Borrowings PBT Trad Payabl Tax Currnt Liabilitis MI & Profit of Ass. (14) Short trm Prisions PAT Total Currnt Liabilitis 715 1,002 1,237 1,371 Adj. PAT Total Liabilits 1,555 2,059 2,689 3,008 Quartrly (Rs. Cr) Q1FY18 Q2FY18 Q3FY18 Q4FY18 Fixd Assts & CWIP Rvnus Goodwill on Consolidatio EBITDA Invstmnts Dprciation Othr non Curr. assts EBIT Cash & Bank Intrst Invntoris Othr Incom Dbtors PBT Short trm Advancs Tax Othr Currnt assts Excptional itm Total Assts 1,555 2,059 2,689 3,008 MI & profit of Ass (5) Cash Flow (Rs. Cr) FY17 FY18 FY19E FY20E PAT Op. profit bfor WC Adj. PAT Chang in WC (124) (82) (167) (161) Prformanc Ratio FY17 FY18 FY19E FY20E Lss: Tax (33) (50) (68) (90) EBITDA Margin (%) 9.2% 10.5% 10.6% 11.3% CF from oprations PAT Margin (%) 5.0% 5.5% 5.5% 6.2% Addition to assts 56 (186) (152) (148) ROE (%) 17.2% 20.8% 19.9% 18.4% Invstmnts (121) (14) ROCE (%) 14.6% 16.0% 16.8% 17.8% Othrs Incom D/E (x) CF from Invsting (18) (183) (121) (117) Fixd Asst T/O Rati Issu of shars Growth Ratios FY17 FY18 FY19E FY20E Chang in borrowings (75) Rvnus 21% 26% 27% 22% Dividnds paid (10) (10) (11) (11) EBITDA -11% 45% 28% 30% Intrst paid (41) (37) (55) (65) PAT -29% 39% 28% 37% Othrs (79) (14) (114) 27 Pr Shar Data FY17 FY18 FY19E FY20E CF from Financing (59) (124) Dilutd EPS Nt Chang in cash (55) (7) 248 (41) Cash EPS Cash at bginning BV Pr Shar Cash at nd Cash Pr Shar Valuation Ratio FY17 FY18 FY19E FY20E Dividnd Pr Shar Pric/Earnings (x) Turnr Ratio FY17 FY18 FY19E FY20E Pric/BV (x) Invntory Days Mkt cap/sals (x) Dbtors Days EV/Sals (x) Crditors Days EV/EBITDA (x) Sourc: Company Data, Nirmal Bang Rsarch 4 P a g

5 r Disclosur: This Rport is publishd by Nirmal Bang Scuritis Privat Limitd (hrinaftr rfrrd to as NBSPL ) for privat circulation. NBSPL is a rgistrd Rsarch Analyst undr SEBI (Rsarch Analyst) Rgulations, 2014 having Rgistration no. INH NBSPL is also a rgistrd Stock Brokr with National Stock Exchang of India Limitd and BSE Limitd in cash and drivativs sgmnts. It is also a rgistrd Portfolio Manr having rgistration no as INP NBSPL has othr businss divisions with indpndnt rsarch tams sparatd by Chins walls, and thrfor may, at tims, hav diffrnt or contrary viws on stocks and markts. NBSPL or its associats hav not bn dbarrd / suspndd by SEBI or any othr rgulatory authority for accssing / daling in scuritis Markt. NBSPL, its associats or analyst or his rlativs do not hold any financial intrst in th subjct company. NBSPL or its associats or Analyst do not hav any conflict or matrial conflict of intrst at th tim of publication of th rsarch rport with th subjct company. NBSPL or its associats or Analyst or his rlativs hold / do not hold bnficial ownrship of 1% or mor in th subjct company at th nd of th month immdiatly prcding th dat of publication of this rsarch rport. NBSPL or its associats / analyst has not rcivd any compnsation / mand or co-mand public offring of scuritis of th company crd by Analyst during th past twlv months. NBSPL or its associats hav not rcivd any compnsation or othr bnfits from th company crd by Analyst or third party in connction with th rsarch rport. Analyst has not srvd as an officr, dirctor or mploy of Subjct Company and NBSPL / analyst has not bn ngd in markt making activity of th subjct company. Analyst Crtification: I, Sunil Jain, th rsarch analyst and author of this rport, hrby crtify that th viws xprssd in this rsarch rport accuratly rflcts my/our prsonal viws about th subjct scuritis, issurs, products, sctors or industris. It is also crtifid that no part of th compnsation of th analyst(s) was, is, or will b dirctly or indirctly rlatd to th inclusion of spcific rcommndations or viws in this rsarch. Th analyst(s) principally rsponsibl for th prparation of this rsarch rport and has takn rasonabl car to achiv and maintain indpndnc and objctivity in making any rcommndations. 5 P a g

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