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- 20 Sep 2024
- ICICI Securities
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UNO MINDA ANNOUNCES FRESH CAPEX PLANS AT SOME OF ITS DIVISIONS
News: In a regulatory filing, the Board of Directors of Uno Minda Ltd. approved several significant projects, including the establishment of a new manufacturing plant in Indonesia with a capacity of ~4.1 million units per annum, by its wholly-owned subsidiary, PT Minda Asean Automotive (PTMA), with an investment of approximately ₹210 Crores. This facility will diversify PTMA's product line into the passenger car segment, producing tail lamps, back-up lamps, and high-mounted stop lamps (HMSL). Additionally, the Board approved the setting up of a new plant in Harohalli, Karnataka, by Toyoda Gosei South India Private Limited (TGSIN), which will enhance capacity (airbags, steering wheels, console boxes) with an investment of ₹283 Crores and is expected to begin operations in Q1FY27. Furthermore, the Board sanctioned the relocation of Uno Mindarika Private Limited's manufacturing plant from Manesar to Farrukh Nagar, Haryana, with an investment of ₹120 Crores, anticipated to commence operations in Q3FY27. These expansions are aimed at meeting future demand and optimizing operational efficiencies across the company's subsidiaries.
Views: The company continues to be aggressive on the capacity expansion plans and is also proactively securing land parcels in all major auto hubs to meet the growing demand from OEMs. It anticipates to grow >= 1.5 times the industry growth rate over long term. We expect the company to maintain its outperformance trend due to its persistent focus on increasing content and tangible work being done on the EV components front. We hold a positive view on the stock.
Impact: Positive