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Banks (Finance)

ICRA Upgrades Ratings for Minda Industries Limited

Strategic Insights

— 1 min read

Minda Industries Limited (MIL), the flagship company of the N.K. Minda Group, has seen significant growth in its consolidated revenues across key product segments. The company's profitability has improved, with a growth of 49% in Profit before Depreciation, Interest and Tax (PBIT) and 96.2% in Profit after Tax (PAT) in FY 2015. ICRA has upgraded the ratings for the Rs. 157.0 Crore Lines of Credit (LOC) facilities of MIL from [ICRA]A/[ICRA]A1 to [ICRA]A+/[ICRA]A1+.

Key Takeaways:

  • ICRA has upgraded the ratings for the Rs. 157.0 Crore LOC facilities of MIL from [ICRA]A/[ICRA]A1 to [ICRA]A+/[ICRA]A1+.
  • The outlook on the long-term rating is Stable.
  • MIL has seen significant growth in its consolidated revenues, with a 23.7% increase in operating income in FY 2015.
  • The company's Profit before Depreciation, Interest and Tax (PBIT) grew by 49.0% in FY 2015, and Profit after Tax (PAT) increased by 96.2%.
  • MIL's consolidated profitability is expected to improve in the medium term on the back of management's focus on boosting capacity utilizations, ensuring cost reductions, and striving to bring down overall break-even levels.
  • The company has a diversified product portfolio, with a strong presence in the automotive switch market, and has been expanding its customer base to include Passenger vehicle (PV), commercial vehicle, and off-highway segments.
  • MIL has acquired Clarton Horn, a Spanish horn manufacturer, in April 2013, and has also increased its stake in group company Minda Vietnam Industries Limited and PT Minda Asean Automotive from 19% to 51%.
  • The company has manufacturing facilities located in India at Sonipat, Pune, Manesar, Aurangabad, Hosur, Chennai, and Pantnagar.

Statistics:

  • Rs. 157.0 Crore LOC facilities of MIL have been upgraded to [ICRA]A+/[ICRA]A1+.
  • The outlook on the long-term rating is Stable.
  • Consolidated revenue growth: 23.7%.
  • PBIT growth: 49.0% in FY 2015.
  • PAT growth: 96.2% in FY 2015.
  • PAT after Minority Interest: 847% growth over FY 2014.
  • Consolidated profitability expected to improve in the medium term.
  • Diversified product portfolio with strong presence in automotive switch market.
  • Expansion of customer base to include PV, commercial vehicle, and off-highway segments.

Sources:

  • ICRA Limited. (2015, August). Minda Industries Limited Instrument Amount Rating Action (Rs. Crore).
  • ICRA Limited. (2015, August). Rating Action Report.

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