The Research Report is only for reference purposes for residents in India, but not for the purposes of advising or recommending on any investment.

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1 The Research Report is only for reference purposes for residents in India, but not for the purposes of advising or recommending on any investment. Kotak Securities Limited or its affiliates are not seeking any business relationship with any viewer of this report nor does Kotak Securities or its affiliates assume any liability for acting on this report nor does it take any responsibility to update information provided in this report.

2 Minda Corp. (MDA) Automobiles Harnessing growth. Minda Corporation reported consolidated net profit of 292 mn in 3QFY16, which was 22% higher than our estimates due to better-than-expected EBITDA margins and lower tax rate. The company continues to gain market share in the passenger vehicle wiring harness segment, which led to 60% yoy revenue growth in Minda Furukawa JV in FY2016 so far. We maintain our BUY rating on the stock with an unchanged TP of 110. Our positive view on the stock is underpinned by (1) Minda s technology tie-ups with global suppliers that give it access to MNC OEMs, (2) its ability to gain market share across segments and (3) robust growth potential from new products such as steering roll connectors and sensors. BUY FEBRUARY 11, 2016 RESULT Coverage view: Attractive Price (`): 91 Target price (`): 110 BSE-30: 22,952 C ompany data and valuation summary Minda Corp. Stock data Forecasts/Valuations E 2018E 52-week range (Rs) (high,low) EPS (Rs) Market Cap. (Rs bn) 19.0 EPS growth (%) Shareholding pattern (%) P/E (X) Promoters 63.2 Sales (Rs bn) FIIs 1.4 Net profits (Rs bn) MFs 3.2 EBITDA (Rs bn) Price performance (%) 1M 3M 12M EV/EBITDA (X) Absolute (2.7) ROE (%) Rel. to BSE Div. Yield (%) Strong results led by robust growth at Minda Furukawa and the standalone locksets business Minda reported consolidated revenues of 6.6 bn (+23% yoy) led by (1) 60% yoy revenue growth in Minda Furukawa led by market share gains in the wiring harness business, (2) steady growth in the standalone lockset business and (3) consolidation of Minda Stoneridge from October Minda Furukawa now has around 10-11% market share in passenger vehicle wiring harness segment as compared to 7% in FY2015; this is led by market share gains at Maruti and Renault/Nissan group. The company has also gained market share with other OEMs such as TVS, Bajaj Auto and Ashok Leyland across different product segments. Gross margins improved by 120 bps qoq led by decline in commodity prices, which led to 6% outperformance at EBITDA level compared to our estimates. As per the management, increase in employee expenses due to higher provisioning for bonus impacted consolidated margins by around 100 bps this quarter. The company reported adjusted net profit of 292 mn, which was 22% above our estimates aided by lower-than-expected tax rate. We remain confident of medium-term growth outlook of the company Minda is well-placed to deliver 20% revenue CAGR over the next five years led by (1) market share gains in wiring harness and locksets, (2) expansion of product offerings with existing customers and (3) industry opportunity of US$500 mn from new products such as steering roll connectors and automotive sensors. We expect the company to sustain EBITDA margins at around 10%. With strong FCF generation, net debt to equity will likely decline to 0.5X by FY2018E from 0.85X currently. We expect Minda to report RoE/RoCE of 22%/19% in FY2018. Fine-tune our earnings estimates; reiterate BUY with unchanged target price of 110 We have increased our FY2016E net profit estimates by 7% due to increase in our standalone EBITDA margin estimates. Our FY E EPS estimates remain largely unchanged. Given strong growth prospects, valuations are reasonable at 11.4X FY2018E EPS. We maintain our BUY rating with unchanged target price of 110, which is based on 15X September 2017E EPS. Nishit Jalan nishit.jalan@kotak.com Mumbai: Hitesh Goel hitesh.goel@kotak.com Mumbai: Kotak Institutional Equities Research kotak.research@kotak.com Mumbai: For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES RATING SYSTEM AND OTHER DISCLOSURES, REFER TO THE END OF THIS MATERIAL.

3 Automobiles Minda Corp. Other key takeaways from the conference call Minda Furukawa s 3QFY16 revenues increased to 1.11 bn as compared to 0.69 mn in 3QFY15. For 9MFY15, revenues were 3.46 bn (70% from Maruti), which implies 60% yoy growth ( 2.16 bn in 9MFY15). Minda Furukawa s market share has increased to 10-11% this year as compared to 7% last year. Minda is negotiating pricing increase from Maruti (for S-Cross) and Renault Group, which might materialize in the next quarter. The company has started supplying steering roll connectors to Maruti and Honda while other OEMs are importing to meet requirements currently. In our view, Minda Furukawa should be able to penetrate into other OEMs over the next few quarters as manufacturers will need to increase localization content to control costs. The company consolidated financials of Minda Stoneridge JV from this quarter where company acquired 51% stake in October QFY16 revenues of Stoneridge JV were 670 mn versus 540 mn yoy. EBITDA margin was 9.5% and net profit was around 30 mn. The company expects FY2016E revenues at 3 bn and expects this to increase to 4 bn in FY2017E led by increased revenues from automotive sensors. EBITDA margin should also improve as capacity utilization increases for the sensors plant (30-35% currently). Revenues from commercial vehicle segment increased by 102% yoy led by (1) 350 mn due to consolidation of Stoneridge, (2) 250 mn due to new order for ABS wiring harness from Ashok Leyland and VECV and (3) increase in MHCV industry volumes. After-market revenues increased by 20% yoy in 9MFY15. The company has finalized plans to set up a new plant in Mexico to cater to new order it has received from VW Group (initial annual revenue order of EUR25 mn). Total capex for this facility would be EUR8 mn, which will be incurred over the next two years; 50% of this will be funded through debt. Exhibit 1: Minda Corp s standalone 3QFY16 results were largely in line with our estimates Minda Corporation standalone results, March fiscal year-end, 3QFY16 ( mn) (%chg.) 3QFY16 3QFY16E 3QFY15 2QFY16 3QFY16E 3QFY15 2QFY16 9MFY16 9MFY15 % chg. FY2016E Net sales from operations 1,771 1,633 1, (1.3) 5,140 4,841 Other operating income (20.5) (27.5) Net sales 1,795 1,762 1,663 1, (1.8) 5,227 4, ,887 Raw materials (1,069) (1,093) (1,048) (1,110) (2.1) 2.0 (3.6) (3,176) (3,081) (4,174) Staff costs (273) (225) (206) (217) (703) (604) (935) Other expenses (251) (240) (239) (241) (707) (730) (954) Total expenses (1,593) (1,558) (1,493) (1,568) (4,586) (4,414) (6,063) EBITDA (1.3) 18.8 (22.1) Depreciation (46) (46) (43) (45) (137) (130) (181) EBIT (1.8) 22.2 (27.3) Other income Interest expense (9) (10) (19) (10) (11.0) (52.9) (13.6) (34) (60) (50) Profit before tax (2.2) 31.3 (27.5) Tax expense (42) (47) (37) (59) (10.8) 14.1 (29.0) (145) (116) (185) Profit after tax (26.9) Adj PAT (26.9) # of shares EPS (Rs/share) (26.9) Tax rate (%) As a % of revenues Raw material Staff costs Other expenses EBITDA margin (%) EBIT Margin KOTAK INSTITUTIONAL EQUITIES RESEARCH

4 Minda Corp. Automobiles Exhibit 2: Minda Corp s consolidated 3QFY16 EBITDA was 6% above our estimates Minda Corporation consolidated results, March fiscal year-end, 3QFY16 ( mn) (%chg.) 3QFY16 3QFY16E 3QFY15 2QFY16 3QFY16E 3QFY15 2QFY16 9MFY16 9MFY15 % chg. FY2016E Net sales from operations 6,501 5,256 6, ,822 14,582 Other operating income (38.2) Net sales 6,565 6,850 5,359 6,162 (4.2) ,008 14, ,139 Raw materials (3,969) (4,247) (3,255) (3,800) (6.6) (11,078) (8,924) (15,486) Staff costs (1,142) (1,120) (883) (1,008) (3,011) (2,486) (4,207) Other expenses (773) (840) (661) (769) (7.9) (2,181) (1,947) (3,012) Total expenses (5,884) (6,207) (4,799) (5,577) (5.2) (16,269) (13,358) (22,705) EBITDA ,739 1, ,435 Depreciation (214) (220) (146) (192) (2.7) (557) (392) (772) EBIT ,183 1, ,663 Other income Interest expense (96) (120) (116) (98) (19.8) (16.9) (1.9) (292) (339) (401) Extraordinary income/(losses) (51.2) Profit before tax , ,556 Share of profit of associates Minority interest (23) (25) (31) 1 (39) (31) (90) Tax expense (92) (88) (61) (118) (21.9) (273) (188) (389) Profit after tax ,077 Adj PAT # of shares EPS (Rs/share) Tax rate (%) As a % of revenues Raw material Staff costs Other expenses EBITDA margin (%) EBIT Margin Revenues by segment 2/3 Wheelers 1,982 2,144 1,910 (7.5) 3.8 5,582 6,015 (7.2) Commercial veicles (CVs) 1, ,602 2, Passenger vehicles (PVs) 2,085 1,768 2, (24.8) 7,023 3, After Market ,801 1, Tool Sales 420 Revenues by product category Safety Security & Restraint Systems 2,429 2,090 2, (1.5) 7,059 6, Driver Information & Telematics Systems 3,283 1,983 2, ,992 5, Interior Systems 853 1,286 1,048 (33.6) (18.5) 2,957 3,501 (15.5) Revenues by geography India 5,318 3,751 4, ,155 10, Europe 919 1, (25.4) (6.8) 2,961 3,447 (14.1) South East Asia (12.5) ,081 (17.5) Exhibit 3: Consolidated net debt to equity has declined to 0.85X as of December 2015 Quarterly debt and cash balances, March fiscal-year ends, YTD ( mn) Dec-15 Sep-15 Jun-15 Mar-15 Short-term borrowings 3,702 3,388 2,594 3,212 Long-term borrowings 1,460 1,531 1,566 1,807 Gross debt 5,162 4,919 4,160 5,019 Cash Net debt 4,691 4,524 3,688 4,578 Net worth 5,538 5,172 4,910 4,666 Net debt to equity (X) Source: Company data, Kotak Institutional Equities KOTAK INSTITUTIONAL EQUITIES RESEARCH 3

5 Automobiles Minda Corp. Exhibit 4: We expect Minda to deliver 20% revenue CAGR over FY E Revenue break-up across segments, March fiscal year-ends, E ( mn) Revenue CAGR (%) E 2017E 2018E 2019E 2020E E Revenues (Rs mn) Standalone business 5,842 6,039 6,368 6,752 7,733 8,850 10,358 11, wheeler lock kits for OEM 2,399 2,683 3,114 3,637 4,251 4, Locksets for after-market 1,141 1,090 1,282 1,474 1,592 1,720 1,857 2, Die casting (Products sold outside group) 1,008 1,046 1,322 1,619 2,189 2, Exports ,085 Others ,075 1,182 Minda SAI 3,624 4,413 5,088 5,295 6,006 6,976 8,111 9, Minda Furukawa 1,848 4,507 6,233 7,851 11,394 13, Minda KTSN 4,048 4,548 4,515 3,838 3,838 4,222 4,222 4, PT Minda Automotive Indonesia 1, Minda Vietnam Automotive Minda Automotive Soluction (Replacement) 1,642 1,597 1,938 2,221 2,455 2,727 2,967 3, Minda Schenk 8,368 Minda Stoneridge 1,321 3,806 4,812 5,909 7, Minda VAST 1,866 2,895 3,294 3,765 4, Revenues 23,525 16,794 21,076 26,853 34,018 39,837 47,887 54,235 (5.3) 19.2 Less: Eliminations 2,176 1,152 1,744 1,913 2,031 2,180 2,341 2,514 Other operating income Consolidated net revenues 21,736 15,939 19,706 25,139 32,242 37,957 45,910 52,135 (4.8) 20.0 Domestic 8,657 10,568 13,000 19,508 26,536 31,733 39,541 45, Exports , Overseas entities (Largely Europe) 12,417 4,548 5,834 4,891 4,891 5,327 5,382 5,440 (31.5) 2.7 Revenues by business segment (Rs mn) Safety security & restraint systems 5,764 6,681 7,913 9,979 12,104 13,796 15,909 17, Driver information & telematics systems 4,056 4,644 7,116 11,123 16,045 19,639 25,415 29, Interior systems 11,529 4,317 4,303 3,838 3,838 4,222 4,222 4,222 (38.9) 2.4 Contribution to revenues (%) Safety security & restraint systems Driver information & telematics systems Interior systems Notes: (a) revenue CAGR is impacted by sell-off of Minda Schenk. Exhibit 5: Our FY E EPS estimates remain largely unchanged Earnings revision table, March fiscal year-ends, E ( mn) New estimates Old estimates % change 2016E 2017E 2018E 2016E 2017E 2018E 2016E 2017E 2018E Standalone Net sales 6,887 7,887 9,027 6,867 8,134 9, (3.0) (3.7) EBITDA , , (0.4) Margin (%) Adj net profit Standalone EPS Consolidated Net sales 25,139 32,242 37,957 25,790 32,821 38,660 (2.5) (1.8) (1.8) EBITDA 2,435 3,158 3,774 2,393 3,137 3, Margin (%) Adj net profit 991 1,302 1, ,298 1, Consolidated EPS (Rs) KOTAK INSTITUTIONAL EQUITIES RESEARCH

6 Minda Corp. Automobiles Exhibit 6: We expect standalone net profit to grow at 16% CAGR over FY E Standalone financial summary, March fiscal year-ends, E ( mn) E 2017E 2018E 2019E Profit model (Rs mn) Net sales 4,842 5,597 5,982 6,168 6,491 6,887 7,887 9,027 10,565 EBITDA ,073 1,237 Other income Interest and finance charges (130) (130) (138) (112) (78) (50) (50) (46) (33) Depreciation (119) (143) (168) (217) (174) (181) (212) (241) (272) Pre-tax profits Extraordinary items (23) (22) Income tax (103) (15) (83) (94) (140) (185) (217) (254) (299) Net profits Adjusted net profit Earnings per share (Rs) Balance sheet (Rs mn) Total equity 1,842 2,676 2,897 3,068 3,315 3,631 3,985 4,399 4,887 Total borrowings 487 1,083 1, Current liabilities 1,096 1,081 1,123 1, ,027 1,165 1,341 Other liabilities Total liabilities and equity 3,471 4,979 5,136 5,290 4,917 5,274 5,669 6,071 6,585 Cash Total fixed assets 1,017 1,132 1,475 1,423 1,281 1,450 1,588 1,647 1,775 Investments ,035 1,763 1,855 1,855 1,855 1,855 1,855 Current assets 1,396 2,031 2,311 1,773 1,608 1,692 1,853 2,101 2,409 Other long-term assets Total assets 3,471 4,979 5,136 5,290 4,917 5,274 5,669 6,071 6,585 Free cash flow (Rs mn) Operating cash flow, excl. working capital Working capital (156) (545) (259) 625 (142) (43) (70) (109) (133) Capital expenditure/acquisitions (176) (277) (514) (201) (205) (350) (350) (300) (400) Investments (178) (288) (293) (728) (91) Free cash flow 222 (320) (279) Ratios (%) EBITDA margin Gross margin Debt/equity (X) Net debt/equity (X) (0.0) (0.0) Core RoAE Core RoACE KOTAK INSTITUTIONAL EQUITIES RESEARCH 5

7 Automobiles Minda Corp. Exhibit 7: We expect consolidated net profit to grow at 23% CAGR over FY E Consolidated financial summary, March fiscal year-ends, E ( mn) E 2017E 2018E 2019E Profit model (Rs mn) Net sales 7,322 13,855 21,736 15,939 19,706 25,139 32,242 37,957 45,910 EBITDA 758 1,349 1,087 1,257 1,855 2,435 3,158 3,774 4,560 Other income Interest and finance charges (174) (268) (424) (275) (395) (401) (441) (377) (361) Depreciation (172) (455) (771) (478) (603) (772) (865) (958) (1,090) Pre-tax profits ,085 1,441 2,050 2,664 3,328 Extraordinary items (176) (30) Income tax (105) (138) (175) (172) (272) (389) (512) (666) (932) Share of JVs Minority interest (2) (90) (235) (323) (434) Net profits ,077 1,302 1,675 1,962 Adjusted net profit ,302 1,675 1,962 Earnings per share (Rs) Balance sheet (Rs mn) Total equity 2,693 3,530 3,462 3,894 4,666 5,606 6,756 8,252 10,003 Minority interest ,324 Total borrowings 2,046 4,759 5,319 5,523 5,018 6,018 5,518 4,718 4,518 Current liabilities 2,127 3,211 3,596 3,451 4,022 5,095 6,301 7,413 8,926 Other liabilities Total liabilities and equity 6,951 11,922 12,729 13,122 14,216 17,320 19,411 21,542 25,040 Cash , ,271 Total fixed assets 2,646 4,978 5,342 5,418 5,861 6,539 6,874 7,316 8,225 Investments Current assets 3,612 5,580 6,583 6,765 7,423 9,228 11,259 13,123 15,053 Other long-term assets Total assets 6,951 11,922 12,729 13,122 14,216 17,320 19,411 21,542 25,040 Cash flow (Rs mn) Operating cash flow, excl. working capital 676 1,082 1, ,427 2,290 2,794 3,294 3,823 Working capital (66) (1,314) (617) (326) (88) (732) (825) (752) (417) Capital expenditure/acquisitions (187) (1,565) (1,150) (321) (455) (1,449) (1,200) (1,400) (2,000) Investments (118) 249 Free cash flow 424 (1,797) (472) ,141 1,406 Ratios (%) EBITDA margin Gross margin Debt/equity (X) Net debt/equity (X) RoAE RoACE KOTAK INSTITUTIONAL EQUITIES RESEARCH

8 Disclosures "I, Nishit Jalan, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report." Kotak Institutional Equities Research coverage universe Distribution of ratings/investment banking relationships 70% 60% 50% Percentage of companies covered by Kotak Institutional Equities, within the specified category. Percentage of companies within each category for which Kotak Institutional Equities and or its affiliates has provided investment banking services within the previous 12 months. 40% 30% 20% 10% 0% 32.9% 34.1% 17.9% 15.0% 6.4% 2.3% 1.7% 0.0% BUY ADD REDUCE SELL * The above categories are defined as follows: Buy = We expect this stock to deliver more than 15% returns over the next 12 months; Add = We expect this stock to deliver 5-15% returns over the next 12 months; Reduce = We expect this stock to deliver -5-+5% returns over the next 12 months; Sell = We expect this stock to deliver less than -5% returns over the next 12 months. Our target prices are also on a 12-month horizon basis. These ratings are used illustratively to comply with applicable regulations. As of 31/12/2015 Kotak Institutional Equities Investment Research had investment ratings on 173 equity securities. Source: Kotak Institutional Equities As of December 31, 2015 Ratings and other definitions/identifiers Definitions of rating BUY. We expect this stock to deliver more than 15% returns over the next 12 months. ADD. We expect this stock to deliver 5-15% returns over the next 12 months. REDUCE. We expect this stock to deliver -5-+5% returns over the next 12 months. SELL. We expect this stock to deliver <-5% returns over the next 12 months. Our target prices are also on a 12-month horizon basis. Other definitions Coverage view. The coverage view represents each analyst s overall fundamental outlook on the Sector. The coverage view will consist of one of the following designations: Attractive, Neutral, Cautious. Other ratings/identifiers NR = Not Rated. The investment rating and target price, if any, have been suspended temporarily. Such suspension is in compliance with applicable regulation(s) and/or Kotak Securities policies in circumstances when Kotak Securities or its affiliates is acting in an advisory capacity in a merger or strategic transaction involving this company and in certain other circumstances. CS = Coverage Suspended. Kotak Securities has suspended coverage of this company. NC = Not Covered. Kotak Securities does not cover this company. RS = Rating Suspended. Kotak Securities Research has suspended the investment rating and price target, if any, for this stock, because there is not a sufficient fundamental basis for determining an investment rating or target. The previous investment rating and price target, if any, are no longer in effect for this stock and should not be relied upon. NA = Not Available or Not Applicable. The information is not available for display or is not applicable. NM = Not Meaningful. The information is not meaningful and is therefore excluded. KOTAK INSTITUTIONAL EQUITIES RESEARCH 7

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