The stock of Minda Industries — a maker of switches, lighting and acoustics systems for vehicles — was up over 10 per cent last week after strong June quarter results. On a year-on-year basis, at the consolidated level, revenues grew 25 per cent to ₹945 crore and profits by 85 per cent to ₹51 crore. The operating (EBITDA) margin came in at 10.7 per cent, about 106 basis points higher than in the June 2016 quarter. The company has been on a purple patch in the last few quarters. Although new vehicle sales weren’t on fourth gear in this period, good replacement market sales and exports have helped. The financials have also got a leg up from an ongoing restructuring exercise from which Minda has gained a higher stake in some group entities. However, with this mid-cap stock zooming three-fold over the last one year, valuations have become steep at 40 times trailing earnings.

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