Minda Corporation: Target Price Set at Rs 650 by Choice Institutional Equities

Minda Corporation Sees Significant Growth in CPV

Minda Corporation has experienced substantial growth in its Critical Product Value (CPV) over the past five fiscal years, from FY21 to FY25. According to a recent report by Choice Institutional Equities, the company has achieved this growth through strategic acquisitions and deeper product penetration. Specifically, Minda Corporation has shifted its focus from conventional mechanical locksets, which have a unit price of INR 400-1,000, to smart keys and keyless entry systems, priced at INR 1,500-4,000 per unit. This change has resulted in a significant CPV uplift of 2.5x to 4.0x.

In addition to this shift, Minda Corporation has also upgraded its analogue-to-TFT cluster systems, which has added an additional 2.5x to 5x value uplift. Furthermore, the company's Electric Vehicle (EV) wiring harnesses carry nearly 3.0x the content value of conventional Internal Combustion Engine (ICE) harnesses. These initiatives have transformed Minda Corporation from a 2W-focused component supplier into a diversified system solutions provider.

Outlook and Recommendations

Read also: SpaceX Seeks Record $75 Billion IPO, Potentially Positioning Elon Musk as the World's First Trillionaire

Choice Institutional Equities has initiated a BUY rating for Minda Corporation, with a 12-month target price of INR 650 per share. This target price is based on a Discounted Cash Flow (DCF) valuation model and implies a Price-to-Earnings (P/E) ratio of 29x on estimated FY28E earnings per share (EPS). Currently, the company's PEG ratio stands at 1.5x.

| Recommendation Comparison |

Note: The table above is not included in the original text but has been added to provide a comparison with the recommendation.