UNOMINDA - UNO Minda Limited Share Price

Management Outlook:
Uno Minda's management is optimistic about India's automotive growth, driven by economic stability, favorable policies (e.g., Union Budget 2025 tax reliefs), and EV initiatives. The domestic auto industry is expected to benefit from rising disposable income, rural demand recovery, and infrastructure investments. The EV sector remains a key focus, with budget allocations supporting local manufacturing and components like lithium-ion batteries.

Major Points:

1. Financial Performance:

   • Q3 FY25 consolidated revenue grew 19% YoY to Rs.4,184 crore, driven by lighting, alloy wheels, switches, and EV components.
   • EBITDA rose 20% YoY (margin: 10.9%); PAT increased 21% to Rs.233 crore.
   • 9M FY25 revenue grew 20% YoY to Rs.12,246 crore, with PAT up 15% to Rs.677 crore.

2. Segment Highlights:

   • Lighting & Switches: Strong growth (15"“20% YoY) due to OEM demand and new products like haptic capacitive switches.
   • Casting (Alloy Wheels): 13% YoY growth; capacity expansions planned (Bawal, Kharkhoda, Supa).
   • EV Components: Revenue from EV 2W/3W reached Rs.238 crore (Q3); new orders for 3.3kW/7.2kW chargers secured.
   • Seating & Acoustics: Domestic growth offset by weak EU exports; new orders expected to boost exports.

3. Strategic Initiatives:

   • Capacity Expansion: Rs.1,324 crore CAPEX (9M FY25) for EV components, alloy wheels, die-casting, and lighting plants.
   • Mergers: Kosei JV merger completed, streamlining operations.
   • R&D Focus: Showcased EV tech (e-axles, battery systems) and ADAS/connected solutions at Auto Expo 2025.

4. Challenges:

   • Near-term softness in CV and EU markets.
   • Rising net debt (Rs.1,964 crore) due to CAPEX/land acquisitions, but manageable leverage (0.34 debt-to-equity).

Outlook:
Management expects sustained growth from EV adoption, premiumization, and new product launches. Margin improvement is anticipated as new capacities stabilize, supported by cost efficiencies and scale.

Question 1: What prompted the capacity expansion at the Hosur plant, and how might budget-related tax savings impact automotive demand?
Answer: The Hosur plant expansion (11,000 to 15,000 tons) addresses growing demand for EV components (battery housings) and traditional products. Budget tax savings (Rs.1 lakh crore disposable income) are expected to boost auto demand, especially in mobility-centric segments like two-wheelers and PVs. Margin guidance (11% ±50 bps) factors in startup costs from ongoing projects.

Question 2: How is the four-wheeler EV charger business progressing, and what is the outlook for European operations?
Answer: The four-wheeler EV charger business is growing with orders from Japanese OEMs (7.2kW and 3.3kW chargers). Margins are initially lower but offset by shared fixed costs. Europe faces prolonged challenges due to weak demand, particularly in mid/low-end vehicles, with no near-term recovery expected.

Question 3: What is the utilization and growth outlook for lighting and casting capacities, and any updates on seating exports?
Answer: Lighting capacity at Khed and alloy wheel plants (Bawal, Kharkhoda) supports future growth. Seating secured a Rs.70 crore annual export order and new domestic OEM contracts. Casting expansion (Hosur) targets EVs and traditional segments, with revenue growth linked to OE demand.

Question 4: What are the revenue potential and ramp-up plans for the new seat belt/airbag plants?
Answer: The Neemrana seat belt plant targets 2x asset turnover at peak. Airbag JV with Toyoda Gosei is operational, driven by OEM adoption of 4+ airbags. Sunroof projects (LOIs from Japanese OEMs) are under development.

Question 5: How is alloy wheel capacity addressing import substitution, and what is the four-wheeler alloy penetration?
Answer: Two-wheeler alloy capacity expansion (6M to 8M wheels) is order-backed, with further growth potential. Four-wheeler alloy penetration is 42-43% (down from 45%), with demand tied to UV/premium segments.

Question 6: What is the impact of JV consolidations, and how are PLI schemes benefiting the company?
Answer: Minda Westport/Onkyo JVs contributed 3.5% to revenue growth. PLI approvals cover sensors (auto) and LEDs (white goods), though limited by scheme timelines and fund allocation.

Question 7: Why are seating/acoustics segments stagnant, and what are margin aspirations?
Answer: Seating exports fell 18% (European slowdown), but new orders and domestic OEM launches will drive growth. Acoustics face EU headwinds. Margins (11%) may improve post-2026 as 12 ongoing projects stabilize.

Question 8: Are EV components and new models (e.g., Maruti Vitara) driving growth?
Answer: EV components (BMS, chargers) and traditional parts supply for models like Maruti's EV Vitara are secured. Casting expansions (alloy wheels, die-casting) aim for incremental revenue from FY26.