UNOMINDA - UNO Minda Limited Share Price

Management at Uno Minda Limited provided a cautiously optimistic outlook for FY26, projecting annual capital expenditures of approximately Rs.1,300 crores, with around Rs.500 crores for sustaining CAPEX and about Rs.800 crores for growth-oriented investments. This is underpinned by a healthy order book and anticipated revenue growth, with a target EBITDA margin of 11% +/- 50 basis points.

Key forward-looking points mention that the Indian economy is projected to grow by 6.2%, with the automotive industry rebounding, particularly in two-wheeler and passenger vehicle (PV) segments, which saw a 9% growth in FY25. The overall industry, however, is expected to maintain low single-digit growth for FY26 due to various headwinds such as economic uncertainties and trade pressures.

Management highlighted that they plan to invest further in emerging technologies, including electric mobility and advanced electronics, to capture market opportunities. The company has announced plans to establish a larger lighting facility and expand capacity in both two-wheeler and four-wheeler markets. They expect strong revenue performance from segments like switches, which generated Rs.1,144 crores in Q4 FY25, and from their electric vehicle (EV) vertical, poised for expansion with new product launches.

Additionally, a total capital allocation of Rs.250 crores for land acquisition in strategic automotive hubs is in progress. Despite higher initial costs from new projects, management anticipates improved operational efficiencies translating to enhanced margins in the long run. Overall, management expressed confidence in maintaining long-term value creation through operational excellence and strategic investments amidst a transformative industry landscape.

Major Questions and Their Answers from the Earnings Call of Uno Minda Limited (May 21, 2025)

1. Question by Chandramouli Muthiah (Goldman Sachs):
   "Could you give us some color on what is the current level of exports from India to the UK for auto components and what is the current level of imports? Also, can you give a rough idea of the e-axle kit value and SOP?"

   Answer:
   We currently have minimal exposure to the UK market. However, we anticipate that if the UK-India FDA progresses positively, opportunities may arise. As for the e-axle, we expect SOP in the middle of next fiscal year; the exact value is sensitive and dependent on market volumes, which are still evolving. It will be consolidated line-by-line in our accounts.

2. Question by Mumuksh Mandlesha (Anand Rathi Institutional Equities):
   "Can you help us understand the provision for fundraise of Rs.2,500 crores? Will it be debt-driven or equity?"

   Answer:
   The Rs.2,500 crores approval allows for both debt and equity. While we foresee no immediate long-term need for funds based on our CAPEX estimates, this is primarily a precautionary measure to ensure financial flexibility.

3. Question by Siddhartha Bera (Nomura Holdings):
   "Could you provide growth expectations for your sensors, controllers, and Westport businesses over the next two years?"

   Answer:
   Our sensors and controllers business has exceeded our targets, achieving over Rs.900 crores this year. We expect growth to continue at 1.5x to 2x the industry growth rate. The Westport business is also growing due to increased government support for CNG infrastructure.

4. Question by Mukesh Saraf (Avendus Spark):
   "How would delays in government approvals impact the four-wheeler e-axle JV's technology transfer and product development?"

   Answer:
   There should be no concerns regarding technology transfer or product development delays. Both partners are committed, and we are proceeding with our plans alongside awaiting approvals.

5. Question by Aditya Jhawar (Investec India):
   "What are the growth expectations across different segments, particularly for two-wheelers and four-wheelers?"

   Answer:
   We anticipate low single-digit growth for the two-wheeler segment and similar growth for four-wheelers. As outlined, we aim to outpace the industry growth, targeting at least 1.5x growth relative to the market.