An employee works on an auto part at a facility in Maharashtra. (Photographer: Udit Kulshrestha/Bloomberg)

Minda Industries Eyes 20% Earnings Growth This Financial Year

Minda Industries Ltd. is confident of a 20 percent earnings growth in the ongoing financial year.

“With GDP growth of 7 percent, we estimate that the [auto] sector should grow around 11-12 percent,” Sudhir Jain, executive director and chief financial officer of the company, told BloombergQuint in a post-earnings interaction. This should allow the company to grow at more than 20 percent for financial year 2018-19, he added.

Diversified product placement, expansion into the alloy wheels factory and its ongoing acquisition of Toyoda Gosei Minda India has made the company “optimistic about its medium-term growth,” Jain said.

The company reported a 53 percent growth in revenue to Rs 1,371 crore on a year-on-year basis, while its profit more than doubled to Rs 140 crore. Earnings before interest, tax, depreciation and amortisation also rose 62 percent to Rs 170 crore and operating margin stood at 12.4 percent. This makes the “immediate target to cross 12.5 percent annual Ebitda margin seem possible,” Jain said.

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Other key highlights from the interaction:

  • Penetration of alloy wheels is increasing.
  • Continuously adding capacity in alloy wheels to meet increasing demand.
  • Started operations in the Gujarat plant last week.
  • Blended capacity utilisation at 80-85 percent.
  • Productivity improvement in various plants have increased capacity utilisation and improved margins.
  • Have already acquired 49.9 percent of TG Minda which produces air bags among other things. All legal approvals are in place for the acquisition.