CLSA initiates UNO Minda stock with outperform rating on growth outlook

Published 30/06/2025, 05:18
CLSA initiates UNO Minda stock with outperform rating on growth outlook

Investing.com - CLSA initiated coverage on UNO Minda Ltd (UNOMINDA:IN) with an outperform rating and a price target of INR1,304.00, citing strong growth prospects.

The research firm expects growth of Indian passenger vehicles, two-wheelers, and commercial vehicles to accelerate over fiscal years 2026-2028 compared to fiscal years 2024-2026, driven by cyclical factors.

UNO Minda, described as one of the fastest-growing Indian auto ancillary makers, has historically demonstrated limited cyclicality in its growth trajectory across industry cycles due to its diversified product and customer base, achieving approximately 2.5 times the OEM industry volume growth on average.

CLSA projects that an industry revival, combined with expanding scale, premiumisation, and improving product mix, should drive UNO Minda’s EBITDA margin higher, resulting in earnings nearly doubling over fiscal years 2025-2028.

The firm views UNO Minda as a "high growth compounding play with a lean balance sheet" and notes it has not modeled potential reinvestment of free cash flow through mergers and acquisitions, which offers an upside risk to its projections.

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