MINDA INDUSTRIES LIMITED

Company Indexing & Ranking

Equentis Scale

1 2 3 4 5
Below Avg. Avg. Good Very Good Excellent

Sr. Rating
Remarks
No. (Score)

Overall score 4.5

1 Financial Ratios Index 3.7
5yr Revenue CAGR of 30% 5
5yr EBDITA CAGR of 16% 3
5yr PAT CAGR of 25% 4
RoCE – 10% in FY15 & 5yr Average RoCE of 10% with increasing bias 3
RoE – 20% in FY15 & 5yr Average RoE of 13% with increasing bias 3
D/E –0.77xs in FY15 & 5yr Average Ratio of 0.83x with ratio being maintained below 1xs 4
Free Cash Flow Generation - Positive FCFF in FY15, prior to which negative due to capex 4

2 Management Pedigree Index 4.6

Ownership: Promoters: Significant management stake with increasing bias (65%-70%) over
the past decade 4
Ownership: FIIs & DIIs: Motilal Oswal PE fund owns ~9% stake & has remained invested
4
since 2010
Promoter Shares Pledged: Nil 5
Key Management Profile 4
Track record towards Capital Discipline, Acquisitions, Capital Expansions 5
Track record towards Accounting Disclosures & Corporate Governance 4
Track record towards Business Risk Diversification & Mitigation 5
Track record towards Business Performance Guidance vs. Actual Performance 5
Rewarding & Protecting interests of Minority shareholders 5
Business foresight & Prudence – successful scale up of operations 5

3 Opportunity and Growth Index 5

Management has displayed business acumen to make best possible use of opportunities 5
Setting up of new plants to service customer needs both within India and overseas 5
Entering new product lines enabling revenue diversification – well diversified portfolio with 5
meaningful presence across – switches, lighting, acoustics and further into alloy wheels and

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 MINDA INDUSTRIES LIMITED
Company Indexing & Ranking

Sr. Rating
Remarks
No. (Score)
batteries
Opportune acquisitions with limited impact on balance sheet health alongside their successful 5
integration – Clarton, horn manufacturing company from Spain
Forging alliances – JVs and Partnerships to bridge gaps w.r.t. technology, markets, customers 5
Business integration through increasing/decreasing stake in group companies – ongoing 5
exercise which is expected to meaningfully enhance turnover and profits
Product quality and scaling up leading to market leadership resulting in Tier-I status amongst 5
auto ancillaries

4 Stakeholder Satisfaction Index 4.7

Creditors: Creditor days consistently maintained around 65 days of sales between FY11-15. 5
Debt-servicing: Supported by strong business cash flows and equity infusions D:E ratio has
seen a significant improvement from 1.86x in FY11 to 0.83x in FY15. The Company does not 5
have any defaults in repayment of loans from any bank or financial institution.
Minority Interests: Dividend payout average maintained around 17% over FY11-15; not taken
5
any decision which is against the minority interest; with share price CaGR ~65%
Employees: The company has not issued any ESOPs as of FY15. Some of the key management
4
personnel have been with the firm for over a decade.
Regulatory: There are no pending litigations or criminal cases against the company or any of
its promoters. The company has proper Board-processes and compliance mechanism 4
In-place.
Auditors: Nil auditor qualifications 5

5 Threat Management 4.6

Product diversification: MIL’s business has evolved significantly from being mainly a switch
manufacturer to a meaningful Tier-I auto ancillary company with a well diversified portfolio 5
including – horns, lighting and further additions of alloy wheels and batteries
Client diversification: Present across all leading OEMs. No single OEM accounts for more
5
than 25% of revenues. Enjoys Tier-I status, ensuring sustainable competitive advantages
Geography diversification: Global presence across 3 continents, exports accounting for ~17%
4
of sales
Channel diversification: Strong brand recall in auto after-market accounting for 20% of sales 4
Competitive dynamics: Mgt. has displayed strong business acumen in handling competitive
4
threats and pressures
Regulatory risk management: As per publicly available information there are no meaningful
impacts likely on account of policy changes, export-import cap, environmental and any other 4
business clearances

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