Minda Corporation hosted a conference call on Nov 2, 2023. In the conference call, the company was represented by, Mr. Aakash Minda, Executive Director (Finance & Strategy), Ms. Pushpa Mani, Lead Investor Relations, and Mr. Vinod Raheja- Group CFO.

Key takeaways of the call

Q2 FY24 saw uptick in demand across most segments, mainly driven by improved consumer sentiments, rising share of business with key customers and increased demand on the back of festive season. However, Exports continues to be subdued due to geo-political issues in key geographies.

On the Domestic front, in Q2 FY24 Industry grew by 0.2% YoY while company grew by 7.1% on the back of robust domestic demand and premiumisation.

Semiconductor supplies continued to ease specially on the back of effective supplier management. Company expect gradual improvement to continue in coming quarters.

In Q2 FY24, company derived 88% revenue from India; Europe & North America contributed 7% and South East Asia 5%.

In Q2 FY24, 2W/3Ws contributed 46% to total revenue, Commercial Vehicles 29%, After Market 11%, and Passenger Vehicles 14%.

In the two-wheeler segment, sentiments remains relatively favorable in urban areas while remaining mixed in rural markets, given the excess monsoon in key western/central markets. However, volume recovery now hinges on rest of the festive demand.

In Q2 FY24, growth in PV volumes was driven by rise in demand for SUV-style vehicles, new launches as well as improved supply. Three-wheeler segment YoY growth is led by passenger carrier, e-rickshaw and goods carrier.

In Q2 FY24, CVs growth was supported by increased spending on infrastructure as monsoon started to recede. Tractor industry would continue to witness healthy retail momentum in second half given healthy subsidy flow ahead of elections in multiple states.

Going ahead, management expects demand to sustain mainly due to gradual recovery in 2W, strong order booking in PV, longish CV cycle and good festive season demand.

The company secured marquee orders across the existing and new technology products with multiple first-time strategic order wins in both ICE and EV segments.

Company secured highest-ever lifetime orders of more than Rs 6500 crore in H1FY24 with electric vehicles (EVs) constituting more than 30% of the orders won during the quarter.

In Q2 FY24, company won order for EV wiring harness from one of India’s largest OEMs for their top selling EV model.

The company undertook expansion of capacities and capabilities at Hosur and Greater Noida wiring harness plants. Both plants underwent capacity enhancement with installation of advanced production equipment’s.

Company took a move towards becoming a complete system solution provider in Passenger Vehicle domain by entering into an agreement for forming a Joint Venture with HCMF (HSIN Chong Machinery Works) for sunroof and closure technology products for passenger vehicles.

HCMF is a Taiwan-based company engaged in various product groups such as Roof Systems, Comfort Closure Systems and Mechanical & Mechatronic System. This partnership aims to provide cutting-edge solutions backed by state-of-the-art futuristic technology.

Company filed six patents during H1FY24 taking the total No. of patents with the group to 257.

In Q2 FY24, company won lifetime order worth more than Rs 450 Crore for smart key from one of the largest 2W OEM for one of their largest selling ICE models. Company also won Strategic order for Electronic steering column lock from multiple leading 4W OEMs in India and Export.

Company’s inhouse team designed, developed and innovated product for front row center console. This will enable it to become complete system solution provider for 4Ws.

During the quarter, company saw margin improvement on the back of increasing efficiencies, streamlining fixed costs and component localization initiatives.

In Q2 FY24, in terms of products Lockset contributed 24% to total revenue, DCD 15%, Clusters 16%, WH 35%, Others 10%.

R&D spend during the quarter was 3% of total revenue.