Minda Industries Ltd's Q2FY19 consolidated net profit rises 8% yoy to Rs73cr : Beats Estimates

The company’s consolidated revenue stood at Rs1,522cr, up 39% yoy and 6% qoq.

Nov 05, 2018 01:11 IST India Infoline Research Team

Minda Industries Ltd Q2FY19

Consolidated Results Q2FY19: (Rs. in cr)

Q2FY19 YoY (%)
Revenue 1,521.72 38.5
EBITDA 189.34 38.6
EBITDA Margin (%) 12.4 1
Net Profit (reported) 72.72 7.9
***EBITDA margin change is bps

Auto ancillary maker, Minda Industries Limited (MIL) reported better than expected numbers in Q2FY19. Consolidated revenue was up 39% yoy (6% qoq) at Rs1,522cr, surpassing consensus estimate of Rs1,449cr significantly. Lower raw material expenses (as % of sales) helped the company maintain EBITDA margin on yoy basis and even report a 55bps qoq margin expansion. At 12.4%, EBITDA margin bettered street estimate of 12.1%. Absolute consolidated EBITDA was up 39% yoy (11% qoq) at Rs189cr. This was higher than street estimate of Rs175cr. Growth in consolidated PAT (before Minority Interest) was restricted to 26% yoy (5% qoq) at Rs84cr, above consensus estimate of Rs81cr. Reported consolidated PAT came in at Rs73cr, up 8% yoy (4% qoq).

Other Highlights

MIL made the following investments during the quarter:
  • Acquired 41.67% stake (18.33cr equity shares for Rs137cr) in Toyoda Gosei Minda India Private Limited (TGMIPL), taking MIL’s total stake in TGMIPL to 47.80%. TGMIPL is now a Joint Venture  company with effect from September 28, 2018.
  • Acquired 80% stake (20,000 equity shares for Rs41cr) in iSYS RTS GmbH (iSYS), making it a subsidiary from September 12, 2018.

Conference Call Highlights
  • The high revenue growth rate of Q2FY19 (up 38% yoy, 6% qoq) was due to consolidation of Minda Rika, which added Rs223cr to quarterly revenues. Since the consolidation of Minda Rika is now complete, revenue growth from new fiscal (FY20) onwards will be purely organic.
  • Capex guidance for FY19E is Rs500cr, which includes Rs200cr allocation towards raising stake in TG Minda and others. Capex for FY20E will be Rs300cr.
  • Gross debt is expected to reduce from Rs900cr currently to Rs850cr by March 31, 2019.
  • BS-VI implementation will boost demand for airbags, reverse parking sensors, LED lighting and electronic control units.
  • Revenue from alloy wheels is expected to be Rs650-700cr in FY19E. MIL is setting up an alloy wheel plant in Maharashtra, which will be operational by FY20 with capacity of 3 lakh vehicles per month.
  • Current capacity utilization at blended consolidated level stands at 80%.

Technical View:

Minda Industries Ltd is currently trading at Rs. 339.50, up by 2.25 points or 0.67% from its previous closing of Rs. 337.25 on the BSE.
The scrip opened at Rs. 352 and has touched a high and low of Rs. 352 and Rs. 333.15 respectively. So far 2,49,368 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 200 DMA.

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