Minda Corporation hosted a conference call on May 19, 2023. In the conference call, the company was represented by, Mr. Ashok Minda- Chairman and Group CEO, Mr. Aakash Minda- Executive Director (Finance & Strategy), Mr. Neeraj Mahajan- Group President, Marketing and Mr. Vinod Raheja- Group CFO.

Key takeaways of the call

In FY23, company clocked 45% YoY sales growth with double-digit EBITDA margins. This performance was driven by strong product portfolio, expanding customer base, robust demand in domestic market and emphasis on product premiumisation.

Company’s margins improved mainly due Semiconductor supply situation easing out and better operational efficiencies.

In FY23, Minda Corporation solidified its position as a top provider of comprehensive solutions in Telematics software and ADAS through strategic technology partnerships with LocoNav and Daesung Eltec. These alliances have placed the company at the forefront of automotive industry advancements, enabling delivery of cutting-edge solutions.

In Q4 FY23, company filed 20 patents, taking the total count of patents to more than 250.

2W Smart key continued to gain traction, representing more than 10% of the total 2W lockset revenue.

In FY23, India contributed 84% to total revenue, Europe & North America 8% and South East Asia, 8%.

In terms of end market, Commercial vehicles contributed 30% to total revenue in FY23, two/three Wheelers 44%, Passenger Vehicles 14% and After Market 12%.

In terms of business verticals, Mechatronics + AfterMarket contributed 48% to total sales in FY23, information & Connected Systems 36% and MIL 16%.

During the quarter, Company secured large orders for TFT cluster from key PV OEMs in India.

In Q4 FY23, domestic auto market delivered positive growth, primarily driven by robust urban sales. However, exports continued to face challenges due to global geopolitical factors.

In Q4 FY23, on YoY basis 2W de-grew mainly due to negative rural sentiments on the back of unseasonal rains and increase in the cost of the vehicle due to rising commodity prices, fuel price hike and change in regulatory norms.

The demand for passenger vehicle remained robust, on back of strong order book with OEMs and the introduction of new products. Additionally, government''s accelerated infrastructure spending contributed to an upswing in commercial vehicle demand.

The tractor segment experienced a remarkable surge in growth, surpassing expectations with a strong double-digit increase.

In Q4FY23 & FY23, domestic Industry grew 1.7% and 12.5% respectively while Minda Corp grew by 13.4% & 27.0% respectively.

Going forward the industry growth is expected to remain favorable especially benefiting from government thrust on capital expenditure, favorable policy initiatives including the new PLI scheme, foreign trade policies, and the recently announced gas pricing guidelines.

Total order book in FY23 was Rs 7789 crore, out of which new business was Rs 4200 crore and Replacement Business Rs 3589 crore.

In FY23, company Won Businesses across segment with EV constituting almost 20% of the orders wins.

Management indicated that semiconductor supply constraints have eased, and commodity prices have resumed an upward trend after a temporary decline in Q2FY23.

In FY23, Lockset contributed 26% to total revenue, WH 30%, Clusters 12%, DCD 17%, others 15%.

In Die casting division, company’s focus is on Niche Products, which are margin accretive.

Capex for FY23 was around Rs 250 crore.

Board recommended Final dividend of Rs 0.80 per equity share, taking the total dividend for the year Rs 1.20 per equity share.