Minda Industries Ltd.

Transcription

1 e Recommendation BUY Another Good Performance... CMP Rs. 1, 278 Taret Price Rs. 1,635 Sector Stock Details Auto Parts & Equipments BSE de NSE de Bloomber de MINDAIND MNDA IN Market Cap 2,028 Free Float 29.11% 52 week Hih/Low (Rs.) 1313/475 Av. volume (BSE+NSE) ( 000) 26,670 Face Value (Rs.) 10 Dividend (FY 16) 70% Shares o/s (Crs) 1.59 Relati Performance 1Mth 3Mth 1Yr Minda Industries 19.2% 43.4% 126.6% Sensex 4.8% 12.1% -4.2% Shareholdin Pattern 30 th June 16 Promoters Holdin 70.89% Institutional (Incl. FII) 4.60% rpote Bodies 8.15% Public & others 16.36% Anupam Bafna ( ) Research Analyst anupam.bafna@nirmalban.com Net Sales Growth EBIDTA Minda Industries (MIL) had another decent quarter where net sales rew by 43.7% YoY at Rs Cr vs Rs Cr in Q1FY16. EBITDA rew or two fold at Rs Cr as aainst Rs Cr same time last year. EBITDA marins witnessed an expansion of 303bps at 9.4% for the quarter on account of lower opetional costs despite of commencement of commercial production Minda Kosei Aluminum plant. Adj. net profit came at Rs Cr (marin 3.5%) as aainst Rs Cr (marin 2.6%) same time last year. Key Hihlihts: 60% of the renues for FY16 came from 2-wheeler sement where as 40% from 4-wheeler. Channel wise, OEM/aftermarket sales were 84% & 16% resp. Durin the quarter followin entities were consolidated in Minda Industries: Rinder India was consolidated in the roup for 28 days w.e.f. from 3 rd June contribu Rs. 97 Cr to the topline Minda Kosei Aluminum Wheel, and Minda Rubber TG Roki Minda. Ltd (manufacturin Filttion System & Canisters for 4W & 2W) to become 49% Joint nture mpany of MIL with effect from October 1, It had been acquired at Rs. 10.5/share (BV - Rs ). Roki Minda has debt of Rs. 80 Cr with D/E tio 0.95x in its books. In FY16 its renue was Rs. 215 Cr with a PAT of Rs.6 Cr. On a compable basis i.e. excludin inonic rowth, switch division rew 21% on YoY basis and Lih by 32%. Durin Q1FY17, PTMA Indonesia commenced supplies to Yamaha. Swtich division receid new orders from Piaio, KTM and Aprillia whereas Lih Division from Tata Motors. MIL s major customers include Bajaj, Honda, TVS Motor, Hero in 2- wheeler sement. Interest cost for the quarter was hiher on account of acquisition loan of Rinder. nsolidation of Minda Kosei and Minda TG Rubber. Rs. 13 Cr for Q1FY17 vs Rs. 5 Cr/ Rs. 5.4 Cr in Q1FY16/ Q4FY16. Valuation and Recommendation: We expect the MIL s top line to row at a CAGR of 24.2% or FY16-FY18E led by product innovation, rowin customer base and upcomin ntures. With the consolidation of the roup business coupled with inonic rowth, better capacity utilization and benefit of ope lee, the EBIDTA marins will inch upwards to ~10.4%(FY18E) suppor the net earnins of the company. At CMP of Rs. 1,278, MIL is tdin at a PE of 12.9/10.2x on FY17E/FY18E earnins resp. We recommend BUY for a taret price of Rs. 1,635 (13x FY18E) implyin a 28% upside. EBIDTAM A. PAT Adj. PATM Adj. EPS (Rs.) P/E (x) EV/EBITDA (x) Adj. ROE Year FY % % % % FY % % % % FY17E % % % % FY18E % % % % 1 P a e

2 Apr-12 Jun-12 Au-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Au-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Au-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Au-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Au Apr Jun Au Oct Dec Feb Apr Jun Au Oct Dec Feb Apr Jun Au Oct Dec Feb Apr Jun Au Oct Dec Feb Apr Jun Au-16 e Productwise Breakup - Q1FY17 20% Swtich 38% Lih 20% Horns Others 22% Geophy wise Breakup - Q1FY17 15% India International 85% Source: mpany Data, Nirmal Ban Research P/E - Forward 1600 P/ BV - Forward Price 3x 6x 9x 12x 15x Price 1x 1.5x 2x 2.5x 3x Source: mpany Data, Nirmal Ban Research 2 P a e

3 e Quarterly Analysis Particulars Q1FY17 Q1FY16 YoY Q4FY16 QoQ Net Sales % % Other ope income % 7.8 (13.3%) Total income from opetions % % st of Material nsumed % % Chanes in Inntroies (0.7) (19.3) (96.4%) 80.4 (100.9%) Purchase of Stock in Tde (10.7%) % COGS % % COGS % of sales 62.5% 66.2% 62.3% Employee st % % Other Expenses % % Total % % EBITDA % 81.5 (11.1%) Marin 9.4% 6.4% 303 bps 11.4% (192) bps Depreciation % % Other income (58.2%) % Interest % % Exceptional Items PBT % 52.3 (35.4%) Provision for Tax % % Tax te 24.9% 23.5% 12.8% PAT % 45.6 (44.4%) MI and profit of associates PAT After MI and associates % 42.6 (36.2%) Adj. PAT After MI and associates % 40.3 (32.7%) Marin 3.5% 2.6% 97 bps 5.6% (208) bps Adj. Earnins per share (Rs.) Source: mpany Data, Nirmal Ban Research Key Hihlihts: Net sales for the quarter were Rs Cr, rowin 43.7% YoY (Rs Cr) and 7.1% QoQ (Rs Cr) led by volume rowth across all sements. EBITDA for the quarter was at Rs Cr vs Rs Cr same time last year and Rs Cr in Q4FY16. EBITDA marins stood at 9.4% witnessin an increase of 303bps YoY (6.4%) but were down 192bps QoQ (11.4%). Adjusted PAT rew more than two fold as compared to a year earlier and stood at Rs Cr. Switches, lih and horns contributed 38%, 22% and 20% respectily of the total turnor of Q1FY17. 3 P a e

4 e Financials P&L FY15 FY16 FY17E FY18E Balance Sheet FY15 FY16 FY17E FY18E Net sales Share Capital Other Op. Income Reser & Surplus % Growth 30.2% 13.9% 33.8% 15.3% Networth Ope Expense Minoirty Interest EBITDA Lon term Borrowins EBITDA Marin 7.0% 9.5% 10.1% 10.4% Lon term Liabilities Depreciation Lon term Provision Other Income Total Non-Current Liab. il Interest Short term Borrowins Exceptional Items Tde Payable PBT Current Liabilities Tax Current Maturiies MI & Profit of Ass Short term Provisions PAT Total Current Liabilities ,017.3 Adj. PAT Total Liabilites , , ,096.2 Adj. PAT Marin 2.5% 4.3% 4.7% 5.2% Net Fixed Assets Shares o/s (No. Cr.) Capital WIP Adj. EPS Instments Cash EPS Lon term Advances Quarterly Q3FY16 Q4FY16 Q4FY16 Q1FY17 Other non Current assets Net Sales Cash & Bank Other Op. Income Inntories EBITDA Debtors Depreciation Short term Advances EBIT Other Current assets Interest Total Assets , , ,096.2 Other Income Cash Flow FY15 FY16 FY17E FY18E PBT EBITDA Tax Add: Profit of Associate Exceptional item Less: Exceptional items (16.0) (5.2) - - MI & profit of Ass. (0.7) (2.6) (3.0) 1.8 Op. profit before WC PAT Chane in WC (15.7) (13.3) (72.7) (47.8) Adj. PAT Less: Tax Performance Ratio FY15 FY16 FY17E FY18E CF from opetions EBITDA Marin 7.0% 9.5% 10.1% 10.4% Addition to assets (65.4) (239.4) (75.2) (75.0) PAT Marin 2.5% 4.3% 4.7% 5.2% Adj. for Acquisitions - - (200.0) - ROE 16.5% 25.6% 28.9% 28.3% Instments 19.1 (15.3) - - ROCE 18.7% 24.4% 27.1% 28.2% Others Income D/E (x) CF from Ins (23.4) (240.7) (257.7) (53.5) Sales Growth 30.2% 13.9% 33.8% 15.3% Chane in borrowins (67.9) (83.9) PAT Growth 748% 92% 47% 27% Dividends paid (10.5) (13.5) (15.4) (15.4) Per Share Data FY15 FY16 FY17E FY18E Interest paid (25.0) (25.7) (40.1) (41.3) Adj. EPS Others (10.6) (56.9) (0.7) (0.0) BV Per Share CF from Financin (114.0) (140.5) Cash Per Share Net Chane in cash Dividend Per Share Cash at beinnin Valuation Ratio FY15 FY16 FY17E FY18E Cash at end Price/Earnins (x) Turnor Ratio FY15 FY16 FY17E FY18E EV/EBITDA (x) Debtors Days Price/BV (x) Creditors Days Mkt cap/sales (x) Inntory Days EV/Sales (x) Fixed Asset Turnor (x) Source: mpany Data, Nirmal Ban Research 4 P a e

5 e Disclaimer: Nirmal Ban Securities Private Limited (hereinafter referred to as NBSPL ) is a reistered Member of National Stock Exchane of India Limited, Bombay Stock Exchane Limited and MCX stock Exchane Limited. We ha been nted certificate of Reisttion as a Research Analyst with SEBI. Reisttion no. is INH for the period to NBSPL or its associates includin its relatis/analyst do not hold any financial interest/beneficial ownership of more than 1% in the company cored by Analyst (in case any financial interest is held kindly disclose)nbspl or its associates/analyst has not receid any compensation from the company cored by Analyst durin the past twel months. NBSPL /analyst has not serd as an officer, director or employee of company cored by Analyst and has not been enaed in market makin activity of the company cored by Analyst. The views expressed are based solely on information available publicly and belied to be true. Instors are advised to independently evaluate the market conditions/risks invold before makin any instment decision Nirmal Ban Research (Division of Nirmal Ban Securities Pvt. Ltd.) B-2, 301/302, Mathon Innova, Opp. Peninsula rpote Park, Off Ganpato Kadam Mar, Lower Parel (W), Mumbai Board No. : /8001 Fax. : P a e