Minda Corporation hosted a conference call on Aug 3, 2023. In the conference call, the company was represented by, Mr. Ashok Minda- Chairman and Group CEO, Mr. Aakash Minda- Executive Director (Finance & Strategy), and Mr. Vinod Raheja- Group CFO.

Key takeaways of the call

Q1 FY24 was a mixed bag from demand perspective, with signs of volume growth moderation in most segments.

In the two-wheeler segment, the slowdown in scooter sales was countered by the pickup in demand for motorcycles, primarily through the changing customer preference in the premium two-wheeler space.

Smart Key continues to gain momentum contributing 15% of 2W lockset revenue.

In Q1 FY24, Three-wheeler segment YoY growth was led by passenger carrier, e-rickshaw and e-cart segment.

In Q1 FY24, CVs saw decline in volume mainly due to the implementation of OBD phase II norms from April 1, 2023, which had led to strong pre-buying in Q4FY23.

Demand for passenger vehicles was mainly driven by new product launches and wedding season while commercial vehicles and tractors witnessed a decline in volume.

Company was able to slightly improve margins on the back of increasing efficiencies, streamlining fixed costs and component localization initiatives.

Going ahead, management expects demand to remain moderate, mainly due to seasonality and is expected to pick up with the beginning of festive season.

In 2Ws, exports are expected to recover gradually going forward and show growth in the second half. However, 2W domestic demand to be supported by higher rural income. CV demand is expected to sustain with increasing economic activities.

In Q1 FY24, India contributed 87% to total revenue, Europe & North America 8% and South East Asia, 6%.

In terms of end market, Commercial vehicles contributed 28% to total revenue in Q1 FY22, two/three Wheelers 48%, Passenger Vehicles 14% and After Market 10%.

In Q1 FY24, Lockset contributed 25% to total revenue, WH 35%, Clusters 15%, DCD 15%, others 10%.

Company secured multiple significant orders in new technology and mobility segments.

Company won significant order for EV products such as battery chargers with lifetime order value of Rs 750 crore; this underlines company’s focus and capabilities to deliver robust sustainable mobility solutions.

Out of the total orders, won of Rs. 3,000 crore, 50% orders came from EV segment.

Company expects to benefit from rising trend of EVs and increasing content per vehicle.

Semiconductor supplies continued to ease; management expects gradual improvement to continue in coming quarters.

Demonstrating focus on innovation, company filed four patents during the quarter, taking the total number of patents filed to 255.

Sustaining business momentum, company intends to keep exploring evolving opportunities for expansion.