Jefferies said Uno Minda offers excellent exposure to Indian autos backed by a fast-growing, well-diversified and largely powertrain-agnostic portfolio, with nearly 90 per cent of its sales coming from the domestic market.
In its initiation note, Jefferies highlighted Uno Minda’s growth track record and strong earnings outlook, projecting a 17 per cent revenue CAGR, 20 per cent EBITDA CAGR and 25 per cent EPS CAGR over FY26-28, along with an average return on equity of around 20 per cent.
“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 premium valuations are “justified for the strong growth, low margin volatility and high ROE.”
The report positions Uno Minda as a growth amplifier in the Indian auto component space, noting that the company has delivered 23-25 per cent CAGR in revenue and EPS over FY16-26E, significantly outpacing India’s passenger vehicle and two-wheeler production CAGR of 4-5 per cent.
Also Read | Explained: How Sebi’s new rule allowing mutual funds to hold more gold and silver may impact investorsJefferies expects this outperformance to continue, driven by rising content per vehicle across segments, capacity expansions 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 the bull case. “Uno Minda is among the top three players in India in most of its component categories,” Jefferies noted, citing a dominant ~55 per cent market share in both four-wheeler and two-wheeler switches, leadership in passenger vehicle alloy wheels with ~45 per cent share, and top-two positions in lighting and acoustics. The brokerage said the company’s portfolio is well placed to benefit from structural trends such as premiumisation, rising SUV penetration 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 about 43x and supported by the company’s fundamentals.
“We initiate at Buy with Rs 1,350 PT at 42x FY28E PE,” the analysts wrote, flagging slower industry growth and any delay in ramp-up of new capacities as key risks to their positive view.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
