Minda Industries is our typical Multibagger stock, but a Stock which is a Good Investment under current Market conditions. It has a presence in a space which offers enormous potential and has a differentiated business model in the sector which will deliver Multibagger returns in the long run. Core Investment Thesis : MIL is a market leader in switches and horns segment commanding a market share of 61% and 55% respectively. The Company caters to both domestic and international markets with good hold in both OEMs and After-market segments. MIL has a wide clientele covering major automobile manufacturers in India as well as abroad.

2. Content Index
•MIL Limited – Investment Snapshot :- Slide #3
• Auto Industry – An Overview:- Slide #5
• Investment Arguments :- Slide #16
•Financial Snapshot - Slide #27 & 28
• Concerns & Reasoning :- Slide #29

3. Minda Industries Ltd– Investment Snapshot
(as on Feb 01, 2017)
Recommendation :- BUY
Maximum Portfolio Allocation :- 5%
Investment Phases & Buying Strategy
1st
Phase (Now) of Accumulation :- 50%
Current Accumulation Range :- 340-350Rs
Minda Industries is our typical Multibagger stock, but a
Stock which is a Good Investment under current Market
conditions. It has a presence in a space which offers
enormous potential and has a differentiated business
model in the sectorwhich will delivermultibagger returns
in the long run.
Core Investment Thesis :
MIL is a market leader in switches and horns segment
commanding a market share of 61% and 55% respectively. The
Company caters to both domestic and international markets
with good hold in both OEMs and After-market segments. MIL
has a wide clientele covering major automobile manufacturers in
India as well as abroad.
Current Market Price – Rs.343
Current Dividend Yield – 0.35%
Bloomberg / Reuters Code –MNDA. IN/
MNDA.BO
BSE / NSE Code – 532539/MINDAIND
Market Cap (In Rs. Cr) - 3411
Equity Share Capital [Cr]– 19.00
Face Value – Rs. 2
52 Week High / Low – Rs.451.85/
Rs.180.40
Promoter’s Holding - 74.02%
Other Holdings - 25.98%

4. Industry Opportunity & Potential
- An Overview

5. Growth of Indian Vehicle Industry
• The Indian Automotive industry is one of the largest and fastest growing industries in the world. Presently,
the dominant product of this industry is two wheelers .
•The Indian auto industry is known as a global hub for manufacturing compact cars and, therefore, the value
of FDI in the sector is also increasing.
•Two wheeler industry in India has evolved invariably in the recent past and consists of three segments viz.,
scooters, motorcycles, and mopeds. Among the three segments the major growth trends have been seen in
the motorcycles over the last four to five years
•In volume terms, the 2Ws segment is the largest segment of the Indian automotive industry, with domestic
sales of 16.0 million units, accounting for 80% of total sales volume of the Indian automotive industry and
exports of 2.4 million in FY2015.

6. Two Wheeler Industry
• The two-wheeler industry slowed down considerably in the last 4 quarters with the segment reporting
flattish volumes. (January 2015-November 2015) volumes grew marginally by 1%.
•The two-wheeler industry is affected by changes in inflation, fuel prices, interest rates, disposable income,
excise duty, economic stability, and changing consumer preference and demographics.
• The two-wheeler industry to return to the growth trajectory in FY2017 and realign with its long term CAGR
of ~10%. Acceleration in urban volumes on account of better economic growth, resulting in higher incomes
in the hands of consumers, coupled with a further reduction in interest rates, are likely to boost volumes.
• Further, the implementation of the Seventh Pay Commission recommending a 23% average salary hike
would result in higher incomes for 5mn government employees and this would act as an important catalyst
for growth.
in two-wheeler demand

7. Four Wheeler Industry
• The domestic passenger vehicle sales growth showed some signs of improvement in FY2015 with the
growth of 3.9% as compared to -5.7% in FY2014, -6.7% in FY2013, 2.2% in FY2012 and 29.7% during FY2011
respectively.
•The growing availability of small and affordable cars has helped expand the passenger vehicle (PV) market
in India. Refreshed product lines, aggressive pricing of new models, expansion of sales and service networks
and capacity enhancements by companies are some of the factors that helped companies in the industry
post record sales.
• The industry was witnessing a slow down during last fiscal due to increase in interest rates, fuel prices and
rising inflation, thereby affecting the demand .
• Further, the buoyancy in the sector was derived primarily from economic vibrancy, changes in Government
policies, increase in purchasing power especially of the upper middle class, improvement in life styles, and
availability of car finance demand.

8. Passenger Car Segment
• In the PV or passenger car segment, which constituted 80% of domestic 4W sales during FY2011-15, the
domestic market has seen a significant increase in new product launches in each segment over the past few
years.
• Since affordability is the most important demand driver in India, the domestic car market has until now
been segmented on the basis of vehicle price.
• Further, price-based competition takes place in a continuum rather than in segments since nearly all the
models are launched in multiple versions at different price points.
•High growth in the mid-size segment has been led by new launches, lower prices, and the significant
success of four models—MSIL’s Esteem and SX4, Honda’s City, and TML’s Indigo.

9. Auto Components Industry

10. Porters Five Forces Analysis- Auto Components

11. Growth Drivers- Auto Components

12. Production Breakup
•Engine parts’ account for 31percent of the entire product range of the auto components sector followed
by‘ drive transmission and steering parts’(19percent).
•The Two wheelers’ is the largest domestic customer segment for the auto components industry with a
share of 79%.
• Original Equipment Manufacturers (OEMs) dominate production volumes by market range with exports
account for a healthy 29percent.

13. Auto Components Industry - Growth Driver
•The Indian Auto component industry employs about 19million people both directly and indirectly.
• The potential for the Indian Auto components industry to grow its work force is going to grow in coming
years as bigger players move to India.
• The Indian Auto component industry Contribution to GDP accounts to 7percent in 2015 from 2.1 percent
in2009.

14. Export of Auto Components
• India’s exports of auto components increased at a CAGR of 15percent from about 5.1 bn in FY09 to about
USD10.2 billionduringFY09-14.
• Europe accounts for the largest share of Indian auto components exports(38.1percent) followed by North
America(21percent)and Asia(25percent).
• The growth of global OEM sourcing from India and the increased indigenization of global OEMs is turning
the country into a preferred designing and manufacturing base.

15. Technological Shift
•Indian manufacturers are embracing best shop floor practices such as 5-S, 7-W, Kaizen, TQM, TPM, 6 Sigma
and Lean Manufacturing.
• Most players in the organized sector are certified ISO 9000, ISO 14001 and TS 16949 companies apart from
private players are keen to set up their R&D base in India.
• The Indian Auto Components companies are increasing deploying IT-enabled automobile support systems
such as Global Positioning Systems (GPS), Anti-Braking Systems (ABS), Automatic Speech Recognition (ASR)
and safety systems to promote innovation in the auto components industry.

16. MIL – Investment Arguments

17. Company Snapshot
•MIL is a flagship company of UNO Minda, NK Minda group, engaged in diversified businesses of
manufacturing of auto electrical parts including switches, lights, horns, gas kits and batteries for the off
road, two, three and four wheelers.
• MIL is a market leader in switches and horns segment commanding a market share of 61% and 55%
respectively. The Company caters to both domestic and international markets with good hold in both OEMs
and After-market segments.
•MIL has a wide clientele covering major automobile manufacturers in India as well as abroad. With the new
acquisitions and ventures, it is adding advanced, technology enabled products to its present portfolio and
also gaining in its market share.
• MIL has more than 28 manufacturing plants in India and 5 R&D centers globally. Minda has partnered with
9 Global Technology players. Till date, it has more than 120 plus product patents and 145 plus design
registrations.

18. Products

19. Technology Tie Ups

20. Two Wheeler Industry Recovery – Growth Driver
•The two-wheeler industry slowed down considerably in the last 4 quarters with the segment reporting
flattish volumes. The January 2015-November 2015 volumes grew marginally by 1% due to decline in rural
volumes on account of two consecutive years of deficient rainfall which led to sluggishness in rural demand
for two-wheelers which account for 40% share.
• The two-wheeler industry is likely to return to the growth trajectory in FY2017 and realign with its long
term CAGR of ~10%. Acceleration in urban volumes on account of better economic growth, resulting in
higher incomes in the hands of consumers.
•A gradual recovery in rural demand on expectations of a normal monsoon in FY2017 and increase in
Minimum Support Prices (MSP’s) for agricultural output would also aid recovery, going ahead. MIL which
draws 80% of its sales from the 2WOEM segment, is likely to benefit from an expected recovery in the two-
wheeler segment.

21. Switches Division
•MIL is the largest manufacturer of switching systems and handle bar solutions for 2/3W and off road
players with a market share of 67%.
•MIL’s division also has a major share of business in all Indian two wheeler OEMs. Developing top notch
products for 2/3W and off-road vehicles, the Switch Division operate five plants in India and two overseas
plants in Indonesia and Vietnam.
•MIL Switches is the largest division of the company comprising of ~43% of the consolidated revenues out of
which 78% was contributed by OEM sales, 14% by replacement market and 8% by exports. MIL supplies
switch mainly to 2W with Bajaj accounting for 45%, HMSI and TVS forming 9% each, Royal Enfield and Hero
around 5% each and others contributing 26%.

22. Lighting Division
•MIL is the prominent player in the Lighting segment after Lumax and FIEM commanding a market share of
12%.
•MIL’s lighting division contributes 18% of consolidated revenues, of this, OEM sales constitute 68%,
replacement 28% and exports constitute of 8%.
•MIL products are offered across all three ranges - head lamp, tail lamp and small lamp (interior light, side
light etc). The lighting division of MIL operates across five plants, with one each in Pantnagar, Sonepat,
Manesar, Haridwar and Chennai.

23. Horns Division
•MIL is the largest manufacturer of horns in India with a market share of 55%. The segment contributes 16%
in the consolidated revenues.
•MIL’s segment dedicatedly works on developing and innovating quality products of optimum sound
performance and high durability.
•MIL acoustic division has manufacturing units at Manesar and Pantnagar and the company is a preferred
supplier to all leading two-wheeler, four-wheeler, off-road and commercial vehicle.
•MIL had acquired MIL acquired Clarton Horn S.A., in 2013, which is a leading manufacturer of automotive
horns, trumpet horns and disc horns in Spain. With this acquisition, MIL is positioned among top two horn
manufacturers in the world which has helped MIL to get access to leading European and American OEM’s.

24. Other Businesses
•MIL has nntered into technical arrangement with Kosei Aluminum Co ltd (Japan) to develop, manufacture
and sell Aluminum Alloy wheels for passenger vehicles.
•MIL is setting up new plant in Bawal (Haryana) with a manufacturing capacity of 72000 unit’s p.a with an
investment of Rs. 200 crs in first phase of production.The proposed shareholding of the Joint Venture
Company will be in the ratio of 70:30 i.e. UNO Minda Group 70% and Kosei Group 30%.
• Alloy wheels will be manufactured in Minda Kosei Aluminum Wheel Pvt. Ltd. and Kosei Minda Aluminum
Co. Ltd. MIL through its holding in the above companies will be largest manufacturer of alloy wheel in India
with capacity in excess of 1.44 mn wheels per annum.
•MIL’s Other product includes CNG/LPG kits, Die casting, Blow moulds, batteries, fuel cap. MIL has strategic
joint venture with Emer, Italy for CNG/PNG kits and Kyoraku Co. Ltd for Blow moulded products.

25. Replacement Market

26. Robust Clientele

27. Consolidated P&L

28. Consolidated Balance Sheet

29. Concerns & Reasoning
1.) Exchange Rate Fluctuations:
MIL derives about 81% revenues from exports and any major volatility in the exchange rate is likely to
impact business operations of the company.
2.) Slowdown in Automobile Industry:
MIL derives its revenues from the Automobile industry which is cyclical and any slowdown in the automobile
industry will adversely impact the company.
3.) Volatility in raw material cost:
MIL depends on steel for its raw material and any steep increase in the price of steel which impact its
margins as the company will find it difficult to pass on the entire price hikes.

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31. THANK YOU