Jefferies said Uno Minda offers Indian automakers excellent exposure backed by a fast-growing, well-diversified and largely powertrain-agnostic portfolio, nearly 90 percent of which comes from the domestic market.
In its innovation note, Jefferies highlighted Uno Minda’s growth track record and strong earnings outlook, forecasting 17% revenue CAGR, 20% EBITDA CAGR and 25% EPS CAGR in FY26-28, and an average return on equity of around 20 percent.
“We believe Uno Minda provides excellent exposure to Indian autos given its fast-growing, well-diversified and largely powertrain-agnostic portfolio with ~90% domestic sales,” the brokerage said, adding that the premium pricing is “justified for strong growth, low margin volatility and high ROE.”
The report positions Uno Minda as a growth amplifier in the Indian auto segment space, noting that the company delivered a CAGR of 23-25 percent in revenue and EPS in FY16-26E, significantly outpacing India’s passenger car and two-wheeler production CAGR of 4-5 percent.
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Jefferies expects this excellent performance to continue, in areas such as increased content per vehicle, capacity expansion in lighting, alloy wheels and airbags, and new growth engines such as sunroofs and EV components.
Uno Minda’s diversified product mix and strong market positions are central to Bell’s case. “Uno Minda is among the top three players in most of its segments in India,” notes Jefferies, citing a ~55 percent market share in both four-wheelers and two-wheelers, leadership in passenger vehicle alloy wheels with a 45 percent share, and top two positions in lighting and axles. The brokerage said the company’s portfolio is well-positioned to benefit from construction trends such as premiumisation, the rise of SUVs and higher adoption of safety and comfort features.
On valuations, Jefferies acknowledged that Uno Minda’s current 42x FY27 estimated price-to-earnings multiple looks rich in absolute terms but argued that it is in line with the stock’s five-year average of around 43x and is supported by the company’s fundamentals.
“We initiate a buy at 42x FY28E PE with a PT of Rs 1,350,” the analysts wrote, adding that slow industry growth and any delay in adding new capacities are key risks to their positive outlook.
((rejection: The recommendations, suggestions, opinions and views given by the experts are their own. (It does not represent the views of The Economic Times.)
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