Minda Industries Review: Buy – JV with FRIWO to expand EV product basket


The company will continue to overtake the industry; ‘Buy’ withheld with TP up to Rs 1,130 from Rs 950

Minda Industries has entered into a joint venture with FRIWO to combine their technical and manufacturing expertise to manufacture and supply various electric vehicle components for 2W and 3W in Indian markets. The joint venture will help MNDA accelerate EV product launches and deliver a wide range of offerings to 2W OEMs. The company is well positioned to benefit from – (i) premiumisation leading to an increase in content per vehicle, (ii) import substitution (alloy rims) and increased location of electronic components (sensors) and (iii) the rapid adoption of EV technology in 2Ws. Given the superior growth opportunities, MNDA remains our number one choice in the automotive accessories arena.

Minda Industries forms joint venture with FRIWO: this joint venture will help the company to offer newer product additions such as battery packs and external chargers (FRIWO already has key customers for these products in India) as well as accelerate product development for the motor controller. The entity will offer a full range of electric propulsion solutions for electric two and three wheelers in the domestic market. The total investments to be made by the proposed joint venture will be 3.9 billion rupees over the next six years, of which 1.6 billion rupees will be invested over the next two years.

JV will further accelerate 2W EV initiatives for MNDA: the company has started production of EV specific products for 2W OEMs. In addition, the joint venture will help the company accelerate the product development schedule and increase the kit’s value offering to 2W OEMs with new products.

Minda well positioned: We have refined our EPS estimates for fiscal year 2022-24e. We expect MNDA to continue to outperform the industry. Maintain the purchase with a revised FV of Rs 1,130 (up from Rs 950 earlier) based on the DCF methodology, as we have increased the long-term growth rate assumptions for the company and postponed to March 2024th.

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