Shares of Minda Corporation Ltd experienced a notable decline of over 6% in Wednesday's trading session, despite the automotive components manufacturer announcing strong financial results for the second quarter of fiscal year 2027. The stock touched a low of Rs 642.15, down from its previous close of Rs 685, opening at Rs 670.
Amidst the share price dip, two prominent brokerage firms, Choice Institutional Equities and Monarch Networth Capital, maintained their 'Buy' recommendations for Minda Corporation shares. Both firms highlighted the company's robust performance and significant growth opportunities, particularly within the electric vehicle (EV) sector.
Q2 FY27 Performance Exceeds Expectations
Minda Corporation reported a consolidated revenue of Rs 2,189 crore for Q2 FY27, marking a substantial 42.6% increase year-on-year. This strong revenue growth was attributed to buoyant demand across various vehicle segments, product premiumisation strategies, and an expanding customer base. The company's Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) also saw a healthy rise of 44.7% to Rs 257 crore, with the EBITDA margin expanding by 17 basis points to 11.8%. Profit after tax surged by 68.9% to Rs 143 crore, underscoring a period of significant profitability.
Brokerages See Strong Upside Potential
Choice Institutional Equities reiterated its 'Buy' rating for Minda Corporation, setting a target price of Rs 860. This implies a potential upside of 25.6% from the reference price of Rs 685. The brokerage noted that the company delivered its highest-ever quarterly performance, significantly outpacing the automotive industry's approximately 18% expansion during the same quarter. Key growth drivers identified included strong order wins, increasing electronic content in vehicles, and accelerated ramp-ups of EV products.
Monarch Networth Capital also maintained its positive outlook and 'Buy' recommendation, assigning a higher target price of Rs 985. This suggests an impressive potential upside of around 44% from the Rs 685 reference price. Monarch's analysis emphasized Minda Corporation's advantageous position to benefit from the rising content per vehicle trend and the substantial growth avenues presented by the burgeoning EV segment.
Electric Vehicle Segment Driving Future Growth
The company's focus on the electric vehicle market was a significant highlight in its Q2 FY27 performance. EV-related products constituted approximately 35% of Minda Corporation's new order wins during the quarter. Choice Institutional Equities pointed out that EV product revenue grew by a remarkable 113% year-on-year, now contributing 10% to the company's total revenue.
Furthermore, Minda Corporation secured lifetime orders exceeding Rs 1,000 crore for TFT instrument clusters, with production anticipated to commence from FY28. Another substantial order for 3.5 kW chargers, valued at over Rs 400 crore, further solidifies its position in the evolving EV ecosystem.