Highlights of the call:

Minda Industries Limited is a flagship company of UNO MINDA Group.

UNO MINDA, a technology leader in Auto Components Industry is a leading supplier of proprietary automotive solutions to OEMs as Tier-1.

Auto Industry for the year FY19 had been a mixed bag, industry witnessed weak demand environment in 2nd half of 2018-19, mainly due to regulatory challenges, higher insurance cost, tight liquidity, hardening of crude prices.

Over medium to long term company expects Auto industry to grow in the range of 6-8%.

Starting FY 2020 automobile sales is witnessing a weak demand and most OEMs have reported decline in April 2019. Accordingly, H1 of FY 20 likely to be subdued and recovery is expected in H2 of FY20 on hopes of normal monsoon, pre buying before the deadline of BSVI implementation coupled with new product launches.

The company continued with its growth momentum and posted strong revenue and profitability growth for FY19.

At a consolidated level, in FY19, it registered revenue of Rs 5908 crore, up 32%.

EBITDA margins grew from 11.9% to 12.2% due to lower raw material cost and higher capacity utilization in new businesses like MKA, MRPL, Rinder and recovery at Clarton Horn.

The management believes believe these margin levels are sustainable.

It will further continue to focus on managing costs and ensure profitable growth.

Leading PV manufacturers have started adding safety feature in line with government notification which has also led to increase in prices.

In Q4 Lighting division has bagged orders worth Rs 52 crore from M&M and Rs 32 crore from MSIL.

In Q4 2W Alloy Wheel Division has bagged orders worth Rs 462 crore from Bajaj Auto to be realised by FY22.

In Q4 Switch Division has been approved as a supplier of CBS parts in Honda, Yamaha, Suzuki & TVS and has also bagged new orders for Honda BSVI models worth around Rs 50 crore.

The company will focus on increasing the kit value and market vale & share with all OEMs.

New segment which is light metal technologies, achieved revenue of Rs 908 crore and accounted for 15% of sales with 23% margin.

Increase in interest cost is mainly due to borrowing done in Q4 of FY19 of close to around Rs 130 crore for financing outlay for sensor projects.

Depreciation is higher in FY 2019 as Rs 400 crore of assets were capitalized.

The Group is a global player in the automotive sector with overseas manufacturing facilities in Indonesia, Vietnam, Spain, Mexico, Morocco & Colombia as well as Design Offices in Taiwan, Japan & Spain.

The group has over 62 manufacturing plants globally and has JVs/Technical Agreements with world renowned manufactures from Japan, Italy and Taiwan.

The company is a world leader in 2W Switches by Volume.

In 2-Wheeler switches it has Market Share in India of around 65%.

Exports to USA, France, Italy, Austria and others contributed to around 6% to Switch sales in FY19.

Exports to Italy, Indonesia, France, Japan and others contributed around 9% to Lighting Sales in FY19.

In Acoustic Systems it has 7% market share in India.

In Alloy Wheel it is the market leader in PV segment with 45% market share in India.

Switches segment revenue declined mainly due to higher exposure in Maruti Suzuki.

Company will merge four wholly owned subsidiary companies with Minda Industries to simplify the structure and increase the synergy of the same. Structure of the scheme is expected to close by FY20.

The company will merge MJ Casting Ltd (which is into die casting components having turnover of Rs 314.57 crore in Fy19), Minda Distribution and Service Ltd (which is into aftermarket having turnover of Rs 525.85 crore, Minda Auto Components Ltd (mainly into trading of automobile parts) and Minda Rinder Pvt Ltd which is into the business of lighting equipment having turnover of Rs 661.22 crore. The merger would result in better organization structure.

MIL's consolidation with its subsidiaries should result in margins cost efficiency and better operational management.

Its capacity expansion is on track. Capacity expansion of Two-wheeler alloy wheel plant is on track. The management expects commercial production from April 2020. Sensor project HTS line is under installation and expected to start in CY19 and full production in Q4 of FY20.

Foray into controllers business through the acquisition of' ‘i-SYS' has been identified as avenue for future growth in EVs. Controller plant activity construction is going on and expected to start commercial production in Q2 of FY20.

Expected capex for FY20 is Rs 450 crore and for FY 2021 is Rs 400 crore. .