Minda Corporation Ltd Q1 FY23 Result Updates. Raw material prices to hamper margins.

Minda Corporation Ltd Q1 FY23 Result Updates.
Raw material prices to hamper margins.

Minda Corporation Ltd reported a net profit at Rs.524.9Mn, increased by 30.8% QoQ and 638.3% YoY.
The company reported at Rs. 10,102 Mn (including Minda Instruments Ltd-MIL) with 6.6% QoQ and 80.8% YoY growth driven by revenue visibility in both ‘Mechatronics & aftermarket’ and ‘Information & connected system’ business segments with increase in business share from existing customers and rise in content per vehicle.
EBTIDA stood at Rs. 1,066Mn, up by 1% QoQ and 246.1% YoY and EBITDA margin stood at 10.6% , declined by 81bps QoQ. The margins were supported by higher operational efficiencies despite increase in raw material prices.
Profit before tax reported at Rs. 709.8Mn, improved by 1.3% QoQ. Finance costs increased by 9.9% QoQ to Rs. 82.1Mn. Revenue growth is driven by overall industry growth.

Growth in all the business segments .

During the quarter, Minda corp has delivered growth in both the business segments. Mechatronic revenue reported at Rs. 4,920Mn 45.1% YoY and 4.6% QoQ with a continued growth in exports and aftermarket sales. It has increased in share of business. EBITDA margin stood at 12.6% in Q1FY23 as compared to 13.4% in Q4FY22 on account of rise in raw material prices during the quarter. The segment mainly focuses on EV segment for 2Ws and increasing share of business from existing customers.

Information and connected system revenue reported at Rs. 3,620Mn, up by 64.9% YoY and 6.8% QoQ; as there was an improvement across most segments that sustained revenue growth despite supply chain constraints. EBITDA margin declined up to 7.1% as compared with 7.4% in Q4FY22 due to rise in raw material prices. In Q1FY23, overall revenue grew by 80.8% at Rs. 10,102Mn which is highest in the history backed by new business and rise in share of business from existing customers from wiring harness and Mechatronics segments. Also, growth in PVs and 2Ws segment led to revenue growth in Die casting business along with exports.

By End market segments, Passenger vehicles, 2-3 wheelers, Commercial Vehicles and after market segments contributed 14.5% , 43.7% ,30.1% , 11.7% in Q1FY23 as compared with 15.9% , 50.4% , 22.6% , 11.1% in Q1FY22, respectively.

Minda Corp reported 85.2% of its revenue from domestic business and 14.8% of revenue from exports in Q1FY23 (8.9% from Europe and North America and 5.9% from South East Asia). Overall exports for the quarter impacted due to geopolitical issues and seasonal impact by a customer. Revenue from die casting business stood at Rs. 152Cr at full capacity utilisation levels. During the quarter, other expenses were de-grew on a sequential basis by 3.1% where Minda Corp has controlled conversion course and administration expense.

The shares of Minda Corporation Ltd are trading at Rs. 224.10, down by 0.07%.

Valuations:
The return on equity (ROE) is 13.5% for the quarter ended June 2022. The price-to-earning (P/E) ratio stood at 25.4. The return on capital employed (ROCE) for the company is 11.8%. The price to book value of Minda Corporation Ltd is 4.05. The EV/EBITDA is 14. EPS during the quarter came at Rs. 9.92.