Minda Industries more than doubled investor wealth in 2021 and remains a favorite electric vehicle (EV) game for the year 2022, experts say.

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The company with a market capitalization of over Rs 29,000 has fallen from the low of Rs 398 recorded on December 31 to Rs 1,047 on December 17, which translates into a 163% increase so far in 2021.

Minda Industries has been providing automotive solutions to original equipment manufacturers since 1958. It has 71 manufacturing plants in India, Indonesia, Vietnam, Spain, Morocco, Mexico, Colombia, Germany and design centers in Taiwan , in Japan and in Spain. It also has sales offices in North America, Europe and ASEAN countries.

Earlier this month, the company signed a joint venture agreement with German company “FRIWO AG” to further accelerate its electric vehicle product initiatives, to combine their manufacturing prowess and technical expertise to manufacture and supply various components of electric vehicles in the Indian subcontinent.

The German company deals with power supply devices and electric drive solutions. Minda Industries will own a controlling 50.1% stake in the joint venture, IANS said in a report.

With a strategy of accelerating its growth through joint ventures and partnerships with global players, Minda has succeeded in exploiting emerging opportunities by launching new technological products and premiumizing its offerings, suggest the experts.

“Minda is also establishing itself as a dominant player in the electric vehicle supply chain and its position is likely to tighten due to the potential doubling of the value of its kit through the JV with FRIWO AG Germany”, Yesha Shah , Head-Equity Research, said Samco Securities Ltd.

“The multiple growth levers at play and the high visibility of income make it a guardian of an investor’s portfolio. While the stock is expected to trade at high multiples, the current valuation is expensive and offers a low margin of safety for new investments, ”Shah added.

Axis Securities maintains its Hold rating on Minda Industries with a 12 month target of Rs 1000. The company has outpaced sector growth due to an increase in the value of the kit per vehicle in both 2W / 4W segments thanks to the introduction of new products, both mechanically and technologically.

“Given its success in developing import substitution products, the company is well positioned to seize business opportunities in the automotive sector. We continue to enjoy Minda Industries as an automotive game, especially with increasing electrification and premiumization, ”the report added.

Having an EV agnostic product portfolio with significant potential for gain in EVs due to new product development will be a key long-term driver for the company. Axis Securities has refined its FY22 / 23E estimates and introduced the FY24E estimates.

Technical control :

Expert: Mehul Kothari is AVP – Technical research at Anand Rathi Shares & Stock Brokers

The Minda Industries weekly chart shows that the stock is trading in a strong bullish trend and also follows a bullish channel. At this point it is trading near the 1100 mark which is the upper end of the bullish channel.

It is possible that the stock will enter some kind of consolidation. So, for traders, it is better to avoid buying when it has reached near 1100.

Investors can continue to hold the stock since it has not confirmed any signs of a reversal. On the downside, supports are placed at 920 and 850.

(Disclaimer: The views / suggestions / advice expressed here in this article are solely by investment experts. Zee Business suggests that its readers consult their investment advisers before making a financial decision.)