MINDACORPNSEQ3 FY25February 12, 2025

Minda Corporation Limited

5,924words
70turns
9analyst exchanges
3executives
Management on call
Aakash Minda
EXECUTIVE DIRECTOR
Vinod Raheja
GROUP CFO
Nitesh Jain
LEAD INVESTOR RELATIONS
Key numbers — 40 extracted
37%
dest growth as rural demand rebounded. The EV 2-wheeler registration for the quarter increased by 37% year-on-year. Coming to the financial performance highlights for Minda Corporation. For the Q3 FY
INR 1,253 crore
ights for Minda Corporation. For the Q3 FY25, Minda Corporation delivered consolidated revenue of INR 1,253 crores, an increase of 7% year-on- year basis. On 9M FY25, the company delivered consolidated revenue of
7%
the Q3 FY25, Minda Corporation delivered consolidated revenue of INR 1,253 crores, an increase of 7% year-on- year basis. On 9M FY25, the company delivered consolidated revenue of INR 3,735 crores, a
INR 3,735 crore
, an increase of 7% year-on- year basis. On 9M FY25, the company delivered consolidated revenue of INR 3,735 crores, an increase of about 9% year-on-year basis. I would like to also share that Minda Corporation's
9%
On 9M FY25, the company delivered consolidated revenue of INR 3,735 crores, an increase of about 9% year-on-year basis. I would like to also share that Minda Corporation's domestic OE business grew
INR 144 crore
n in the commercial vehicle segment. In terms of profitability, the company reported an EBITDA of INR 144 crores at an EBITDA margin of 11.5% for the quarter. This is the highest-ever EBITDA margin, which is i
11.5%
n terms of profitability, the company reported an EBITDA of INR 144 crores at an EBITDA margin of 11.5% for the quarter. This is the highest-ever EBITDA margin, which is in line with our consistent and
INR 90 crore
sustainable performance goals. Profit before tax for the quarter stood at INR 90 crores with a margin of 7.2% and PAT of INR 65 crores with a PAT margin of 5.1%. Key recent development
7.2%
Profit before tax for the quarter stood at INR 90 crores with a margin of 7.2% and PAT of INR 65 crores with a PAT margin of 5.1%. Key recent developments include order wins in
INR 65 crore
Profit before tax for the quarter stood at INR 90 crores with a margin of 7.2% and PAT of INR 65 crores with a PAT margin of 5.1%. Key recent developments include order wins in Q3, and lifetime order
5.1%
uarter stood at INR 90 crores with a margin of 7.2% and PAT of INR 65 crores with a PAT margin of 5.1%. Key recent developments include order wins in Q3, and lifetime order wins exceeding INR 1,250 cr
INR 1,250 crore
rgin of 5.1%. Key recent developments include order wins in Q3, and lifetime order wins exceeding INR 1,250 crores with EV platforms contributing over 25% of these wins. For the first nine months of the year,
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Guidance — 20 items
Chirag Jain
opening
“On behalf of Emkay Global Financial Services, I would like to welcome you all to the Q3 FY25 Earnings Conference Call of Minda Corporation Limited.”
Aakash Minda
opening
“In Q3 FY25, the Indian automotive industry exhibited mixed performance across segments.”
Aakash Minda
opening
“For the Q3 FY25, Minda Corporation delivered consolidated revenue of INR 1,253 crores, an increase of 7% year-on- year basis.”
Aakash Minda
opening
“On 9M FY25, the company delivered consolidated revenue of INR 3,735 crores, an increase of about 9% year-on-year basis.”
Aakash Minda
opening
“Post this, the net debt to equity in the short term will be 0.6x, and pro forma net debt to pro forma EBITDA is less than 1.8x.”
Aakash Minda
qa
“Going forward, they will be having a larger penetration in the 4-wheeler segment on the TFT side.”
Raghunandhan
qa
“And that is more of a medium-term question.”
Raghunandhan
qa
“And if you can talk about FY26, how can there be revenue potential of sales from Minda to Flash?”
Aakash Minda
qa
“We have now products that are already going to be in mass production by the end of FY26, where we've already won orders.”
Raghunandhan
qa
“The revenue potential for Minda to Flash in FY26 or over the next 2, or 3 years, how do you see the ramp-up?”
Risks & concerns — 2 flagged
However, this was partially offset by subdued exports demand from particularly European market, the slowdown in ASEAN countries, and a downturn in the commercial vehicle segment.
— Aakash Minda
For a quarter-on-quarter basis, the auto industry saw a decline on a quarter-on-quarter basis due to various reasons.
— Aakash Minda
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Q&A — 9 exchanges
Q
Sir, firstly, several new products and focus areas were highlighted at the Auto Expo. Can you talk about key growth areas, the top three product segments where you see good traction ahead?
Aakash Minda
Hi Raghu. Thank you for visiting the Auto Expo. Our growth areas besides our legacy businesses, which is in the area of vehicle access, driver information systems, wiring harnesses, die casting, and electronics. All these product lines are moving towards premiumization. And therefore, you are seeing in these areas is where the growth is coming from, followed by some of the new products that we have launched in these verticals itself, which are on the EV power electronics front as well as then the EV charging stations. Number two is on the Intelligent Transportation System, which is coming from
Q
Congratulations on a record-high 11.5% EBITDA margin. Sir, my first question is on your R&D and investment, which is almost more than doubled in FY24, how that is shaping up in the first nine months? And what would be this as a percentage of sales going forward? And in context with that, we already have 290-plus patents filed. So, what is the status latest update on that side?
Aakash Minda
Yes. So in the previous years, we've been spending about 1.5% to 2% in our R&D. Now as an opex and capex put together, we are investing close to about 4% or north of 4% in the R&D. And this year, of course, in the FY26 also, we expect to continue in a similar range. In the first nine months of the year, FY25 also, we've invested in similar lines, where we have set up a new R&D center as well as expanded the areas of products into the areas of the design studio. As well as the integration of product lines, and EV products and strengthening the competency, capabilities, and capacities of our pro
Q
Sir, I have a more general question on the industry. Where do you see the CV industry going forward? And can we see some signs of the pickup of the CV industry?
Aakash Minda
So, we believe that the CV industry should bounce back in the next recent quarters to come. But of course, we are expecting a single-digit growth in the next few quarters. As per our planning, that's what we look at. And sir, like recent kind of the numbers, auto numbers have also been going down. Do we foresee any impact in the coming quarters in the Q4 or Q1 of FY26? Will there be any impact due to the auto numbers going down? Or will that remain stable? Which numbers going down, sorry? Auto. 4-wheeler. No. So again, the 4-wheeler, I think, is in the right space where, of course, new product
Q
Aakash, just wanted your sense of how, let's say, what kind of growth we can expect over the next two, three years at a broader level. And especially on EBITDA margins, now we are already at 11.5%, which is your all-time high EBITDA margins. Do we see further scope for margins to improve for the next two, or three years?
Aakash Minda
So, Chirag, we have always been wanting to outperform the industry, and that is where we commit to ourselves and to everybody at large. And if you see in the current quarters as well, we have been delivering the growth, which is for the domestic OE market. But due to the export market being sluggish and the local commercial vehicle segment, which is where we have about 27% dependence is kind of pulling us. But even if all these various different segments are expected to be stable, this should be easily giving Minda Corporation the desired growth, which is outperforming the market. In the midte
Q
Sir, where do we stand in terms of our Smart Key business? How are we progressing on that part? Have we got any orders on that front?
Aakash Minda
Yes. Hi, Shailly, as I mentioned, we are doing about 7% to 8% of Smart Keys, our total Security division, about 7% to 8% of revenue comes from the Smart Key businesses while more and more penetration of the new product launches are going to come in, in terms of ICE and EV, this penetration is expected to grow further as what we have already shared previously by 2030 and beyond. And how are we looking at FY26 for us? Any targets? In terms of? Our revenue and margin target. So I just explained this in the previous question, but we would definitely want to grow 1.5x the industry. So while the ind
Q
Sir, my question was regarding margins. So Minda has delivered the highest quarterly margin. So what were the key drivers behind this performance? And was it the function of operating leverage, product mix or cost efficiency?
Aakash Minda
So there have been various factors where we have been constantly working. If you look at our journey of the last many quarters and years, we've been focusing on operational excellence in various divisions. Of course, one of the most important areas have been our wiring harness division, where previously, they have been an underperformer. But I'm happy to share that in line with our commitment, we'll be able to bounce back in that business. And gain more orders as well as become more efficient and the help of localization of the products and connectors is coming into play. Of course, when there
Q
So my question was related to exports. So on the export side, are we seeing any green shoots visible for the coming quarters or so? Or any recent developments just to understand more color on the current ongoing weakness on the export side. Any color would be helpful.
Aakash Minda
Yes. I think in the past year-on-year basis, our exports as a revenue have been going down, but happy to share that on a quarter-on-quarter basis, it is flat. As we have shared whatever ways we could expect they are there. But of course, with the new geopolitical concerns, it is in somewhere opening us opportunities. But of course, somewhere they could become challenged in terms of the American market, however, the future comes up with. So we are also continuously evaluating the situations, but our focus right now is to win order book for the various products and various customers that will he
Q
Sir, I have two questions. The first one is on revenue breakup segment-wise. Other segment has gone down from 13% to 8% in nine months FY25 versus last year's nine months. So within others, which is a major driver or any further explanation on this?
Aakash Minda
Yes. When it comes to others, it is comprised of various product lines. So please pardon me, I will not be able to share the various details. But there again, the smaller segments and smaller businesses combine this other, which is the Tata Motor division, which is the electronics, which is the Intelligent Transportation Systems, and the EV products. So definitely, some have increased, some have gone down due to the export challenges, which are somewhere dependent extremely on the export side as well. So that is where the other segments have grown particularly. So there are sensors, for exampl
Q
So thank you very much for joining the call. We remain highly confident in our growth trajectory, both in the near and the long term, driven by strategic investments and an unwavering commitment to advancing our products and technologies. The union budget announced by the Honorable Finance Minister is a progressive and growth-oriented budget, and we are very confident that this will further boost the Indian automotive industry and Indian economy, of course, giving opportunities for Minda Corporation. We are dedicated to customer-centric, meaningful solutions, which will create absolute value a
Management
Speaking time
Aakash Minda
30
Moderator
11
Mitul Shah
8
Raghunandhan
6
Shailly Jain
4
Bhushan
4
Chirag Jain
3
Karan Kamdar
3
Munindra Upadhyay
1
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Opening remarks
Chirag Jain
Thank you, Farah. Good evening, everyone. On behalf of Emkay Global Financial Services, I would like to welcome you all to the Q3 FY25 Earnings Conference Call of Minda Corporation Limited. Today, we have with us from the management team, Mr. Aakash Minda, Executive Director; Mr. Vinod Raheja, Group CFO; Mr. Sameer Sharma, Group Head, Strategy and M&A; and Mr. Nitesh Jain, Lead Investor Relations. I'll now hand over the call to the management for their opening comments, post which we'll open the floor for Q&A. Over to you, sir.
Aakash Minda
Good afternoon. Thank you, Chirag, and thank you, Emkay Global Financial Services for hosting the call. Good afternoon, everybody, and welcome to the Q3 and 9M FY25 Earnings Conference Call for Minda Corporation. I hope you are all doing well. It is a pleasure to connect with you today, and I look forward to presenting the group's performance for the quarter and offering insights into recent developments. In Q3 FY25, the Indian automotive industry exhibited mixed performance across segments. The 2-wheeler market maintained its upward trajectory, driven by strong demand in both urban and rural areas. The passenger vehicle segment showed steady growth, driven by strong growth during the festive seasons and enhanced discounts in various segments. The commercial vehicle sector faced headwinds due to prolonged monsoon delays and low infrastructure spending leading to sluggish demand. Meanwhile, the tractor segment registered modest growth as rural demand rebounded. The EV 2-wheeler registra
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