Spark Minda wins Rs 1,649 crore worth of new business in Q3 FY2021

by Shahkar Abidi 05 Feb 2021

Spark Minda, a part of the Ashok Minda Group, has secured orders totalling Rs 1,649 crore in the October-December 2020 period (Q3 FY2021). Out this, Rs 1,152 crore was for replacement orders and Rs 497 crore for new orders.

The Gurgaon-headquartered company is a supplier to leading OEMs including  Ashok Leyland, Bajaj Auto, CNH, Hero MotoCorp, Honda Motorcycle & Scooter India, Hyundai, Mahindra & Mahindra, Maruti Suzuki, Suzuki Motorcycle, TVS Motor, Tata Motors, VE Commercial Vehicles and Yamaha Motor which straddle the two- and three-wheeler, passenger and commercial vehicle segments. The diversity of MCL's client base can be gauged from the fact that its largest client accounts for just about 10 percent of total revenues. This helps in thinning its business risks during tough times, unlike some of its peers.

The company's mechatronics division attracted Rs 487 crore worth of business, of which 58 percent comprised new orders while 42 percent were for replacement. In the information and connected systems segment, total orders stood at Rs 1,116 crore comprising 14 percent new business 86 percent replacement. The plastic and interiors vertical drew new business worth Rs 31 crore. There were other new orders valued at around Rs 15 crore for its other businesses.

Clocks highest-ever quarterly profit in its history
The company, which recorded revenue of Rs 740 crore in Q3 FY2021, a growth of 12.8 percent on sequential basis, earned its highest ever quarterly net profit of Rs 49.5 crore, up 91.5 percent year on year.

Ashok Minda, chairman and Group CEO said, "The auto industry in Q3 FY2021 saw both year-on-year and sequential growth in overall demand primarily driven by pent-up demand in channels, festive season during the period and preference for personal transport due to Covid-19".

According to Minda, the company has seen its revenue grow by 36 percent as compared to industry growth of 17 percent YoY for the quarter. The higher growth was due to 55 percent growth in the aftermarket division and also export from India increased by more than 25 percent. "The content increase in two- wheeler wiring harness due to transition to BS VI also helped us. With higher operating efficiencies and cost control measures, the company was able to deliver a successive quarter of improved double-digit EBITDA margins of 11.1%. In this quarter we have reported the highest-ever profit after tax of Rs 495 million.” Minda added.

Semiconductor shortage a growing concern
As per the company management, the supply challenges remain primarily due to the global shortage of semiconductors, something which is set to run well into 2021. This is resulting in the softening of demand across the two-wheeler, passenger vehicle and commercial vehicles segments.