Minda Industries is a mid-cap automotive ancillary company. The company is an automotive solutions provider for original equipment manufacturers. The company offers a range of products in various verticals of automotive components, such as switching systems, acoustic systems and alloy wheels.
Company activity looks positive and brokerage firm KR Choksey suggests that company activity is “focused on premiumization across all segments and strong orders over the course of the year. space for EVs and incremental demand across all segments. As a result, we estimate PAT to grow by around 61% over the next
FY22-24E with expected recovery in margins at normalized production costs (excluding the rise in aluminum prices). We expect input cost pressures to continue in the first 2 quarters of FY23. Our EPS estimates stand at INR 21.4 / INR 32.3 for FY23E / FY24E, respectively. We maintain our target price of INR 1,180/share (36.5 PE at FY24E EPS) and change our BUY recommendation from ACCUMULATE with a 33% upside.”
Furthermore, the stock is down significantly from its 52-week high price of Rs. 1257.4, i.e. is available at a discount of over 31%.
So, given the huge potential ahead for the company given the push for electric vehicles and the additional demand expected across all sectors, the stock will be a good buy ahead of the ex-bonus date that , for the action, falls on July 7, 2022.
AU Small Financial Bank
The small funding bank is trading near its 52-week high and is just over 13% away. For stock, Motilal Oswal has a “buy” on the stock. Motilal on the title maintains that the bank “achieved a robust performance with 9% of profits beaten by 43%
Year-over-year NII growth, stable margins and sequential double-digit business growth. Asset quality improved significantly with GNPA/NNPA ratio down 62bp/79bp
QoQ at 1.98% / 0.5%, respectively, thanks to robust collection efficiency and healthy reductions. The restructured portfolio decreased to 2.5% of loans (from
3.1% in 3Q22), while PCR improved strongly by 2,420 bps QoQ to 75% as the bank cautiously revised its provisioning policy to strengthen its balance sheet.
AUBANK further announced a 1:1 bonus issue and recommended a dividend of INR 1 per share (pre-bonus issue). We are increasing our FY23E/FY24E PAT by around 6%/10% and estimate that AUBANK will produce a CAGR of 37% on FY22-24. We expect RoA/RoE of 2.1%/21.0% for FY24, respectively. Hold BUY with a TP of INR 1,625.”.
Moreover, with regard to asset quality, the bank’s net NPAs have improved considerably and are indeed below the pre-Covid level.
So good upside potential within 2 counters and an additional bonus share, one can buy these stocks at current levels.