Minda Industries consolidates product lines, bags new orders

In a bid to consolidate its product streams, the UNO Minda Group has kicked off a re-alignment programme across its Group companies.

Minda Industries, a Group company, has increased its stake in Minda TG Rubber to 51 percent and in Kosei Minda Aluminum Company to 30 percent from zero percent. In MJ Castings, it has increased its stake to 98 percent from 50 percent and in PT Minda Asean Automotive (Indonesia) and in SAM Global Pte Ltd, Singapore to 100 percent from the existing 51 percent.

As part of the consolidation scheme, the Board of Minda Industries has approved a merger scheme under which MJ Castings will be merged with Minda Industries (MIL). PTMA, Indonesia will become a 100 percent subsidiary of Minda Industries as will MIVCL, Vietnam.

New projects in the bag

Meanwhile, UNO Minda has also won several new projects with leading carmaker Maruti Suzuki India and Honda Cars India for their new car programmes.

Minda Acoustics has been awarded 100 percent business for Maruti Suzuki’s new upcoming model (codename YSD) for which supplies have commenced from April for electro-mechanical disc horns. At peak volumes, the business is pegged at Rs 8 crore per annum. In addition, horns will also be supplied to  the new Honda Jazz and Brio models. Supplies for the Jazz have already commenced and the Honda order is a key addition to the company’s portfolio.

Further, Minda Kosei Alloy Wheels plant at Bawal has been commissioned during May and is supplying to Maruti Suzuki’s new Vitara Brezza SUV and Baleno hatchback models.

Supplies of switches, horns and lights have also started for Honda Motorcycle & Scooter India’s new motorcycle (codenamed K74). The company will be completing the acquisition of the global lighting business of Europe-based Rinder Group during this quarter, becoming one of the largest manufacturers in automotive lighting.

Targets 20% growth in FY’17

Minda Industries maintained its growth during FY’16 with consolidated sales at Rs 2506 crore against Rs 2206 crore in FY15 recording a growth of 14 percent YOY. A growth of 20 percent is forecast for this fiscal.

The company has reported an EBITDA of Rs 244 crore, a growth of 50 percent year on year. EBITDA margin has expanded by 239 basis points to 9.75 percent for FY16.

PBT (before exceptional items) for the consolidated entity grew to Rs 139 crore for FY16 as against Rs.63 crore in FY15, a growth of 121 percent YoY.

Profit after tax and minority interest increased by 64 percent YoY from Rs 68 crore in FY15 to Rs 111 crore in FY16. PAT after MI margin stood at 4.43 percent in FY16 from 3.08 percent in FY15, an expansion of 135 basis points during the year.

Earning per share for the company is Rs 69.9 per share during FY16 compared to Rs 42.8 per share in FY15.

Consolidated ROCE has consistently improved from 6 percent in FY14 to 15 percent in FY15 to 18.2 percent in FY16. Consolidated ROE following a similar path, has also improved from 2.3 percent in FY14 to 18.6 percent in FY15 to 26.4 percent in FY16.

This growth has been on account of the strong performance of the standalone entity and backed by improved performance of its subsidiaries including the turnaround of certain loss-making subsidiaries. Group consolidation has also been an enabler in achieving these numbers.

The Rs 39 billion Group has manufacturing facilities in Indonesia, Vietnam and Spain and offices in Japan, Europe, and China. It has 38 manufacturing plants in India with  joint ventures and technical agreements with manufacturers in Japan, Italy, and India.