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Electric Vehicle Value Chain Stock No. 5 | Minda Industries Limited

Electric Vehicle Value Chain Stock No. 5 | Minda Industries Limited

Published on 04 May 2021 Views 170 Comments 2

The next stock in our Electric Vehicle Value Chain will be from Auto-Ancillary Industry i.e., Minda Industries Limited, the largest players in Switch player in India. Let’s read more about this company and discuss how this company fits in this Electric Vehicle Value Chain.

Introduction:

Minda Industries is a Mid-Cap Company in terms of Market Capitalisation. It is a technology leader in the auto industry and is engaged in the auto-ancillary parts business.

About the Company:

  • As discussed above, Minda Industries Limited is a Mid-Cap company and is engaged in Auto-Ancillary and Auto Components manufacturing.
  • The company is having the most diverse product portfolio in almost all the vehicle segments like 2-wheelers, 3-wheelers, and 4-wheelers.
  • Minda Industries is the largest player of Switches in Auto Components Parts in India.
  • On the Two-wheeler switches side, this company is having a market share of 65%, in Four-wheeler switches it is having a market share of 55% and is having a market share of 20% in Automobile Lights.
  • This auto component will continue to work on EV as well, and hence Minda Industries can be benefited from the same.

Role in EV Value Chain:

  • In the context of Auto-Ancillary, they are considering strategies like:
  • Upgrade and Enhance existing products for EV-specific applications and develop new EV-specific products.
  • They plan to focus on 2-wheelers and 3-wheelers which is expected to see maximum growth in the coming period.
  • Product of EV includes Brake Paddle Systems, Accelerator Sensors, Vaccum Sensors, and EV Battery Temperature Sensor.
  • Other Products include Security Systems, Wiring Harnesses, Couplers, and Terminals for 2 wheeler, 3 wheeler, and 4 Wheelers.
  • Already, made a tie-up with Chetak Brand of Bajaj for the components like LED Highlights.
  • Also, they will be serving Front Position Lamp, Headlight, Indicators, Tail Lamp, Stop Lamp, and Switches for TCS IQube.
  • This tie-up with 2 major players in the market is a positive sign for the company.
  • They have also entered in Technological Licensing Agreement with AMP, a US-based company for battery management systems for 2-wheeler, 3-wheeler, 4-wheeler, and for Commercial Vehicle also.
  • Minda Industries along with its Partners is also working on the products like Body Control Module, Telematics, Li-ion Battery Pack, Smart Plug, DC, DC Converters, Onboard Chargers, Battery Management Systems.

Last Year Performance:

  • The profitability of the first two quarters for Minda Industries was not quite due to the pandemic.
  • But, the third quarter of FY21 proved pretty well for the company. It also obtained a Profit of around Rs. 100 Cr.
  • As per the current valuation, this stock looks overvalued, but with a reduction in EPS in the coming time, it can come back to normalcy.
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