Motilal Oswal's research report onUno Minda
Uno Minda (UML) has a well-diversified and largely fuel-agnostic product mix with an ability to enter new high-potential segments through partnerships or its own R&D (37 R&D centers globally). Further, UML is emerging as one of the key beneficiaries of structural growth trends in the industry, such as premiumization and EV transition, which are driving a steady rise in content per vehicle (CPV) for UML over the years. Management’s long-term aspiration to deliver 1.4x-1.5x higher growth than the underlying industry appears highly credible given its past track record of outperformance above this threshold. Management expects FY27 to be a defining growth year for the company, as seven of its 11 new projects will be operational or in a ramp-up phase. We believe UML can be viewed as a long-term structural growth story given its consistent outperformance to core industry growth with healthy return ratios and its ability to foray into new emerging businesses with high-growth potential. Considering these factors, along with solid financial strength and robust growth expectations (19%/23% CAGR in revenue/PAT over FY26-28E), UML’s premium valuations appear justified.
We value UML at 45x FY28E EPS to arrive at our TP of INR1,406 per share. We initiate coverage on UML with a BUY rating and position UML as our top pick in the auto ancillary sector.
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