Shares of auto component maker Uno Minda have delivered extraordinary returns to their investors in the last 10 years, soaring over 10000 percent. The stock has jumped from ₹5.4 in May 2013 to ₹555 now, rallying as much as 10190 percent in 10 years.
An investment of ₹1,00,000 in the stock, ten years ago, would have turned into over ₹1 crore now.
UNO Minda is a diversified auto ancillary supplier, manufacturing products such as switches, horns & lights. UML holds a leadership position in the switch business with a market share of 67 percent.
The stock has also given multibagger returns in the last 3 and 5 years. From its COVID-low of ₹102, hit in March 2020, the stock has given strong returns, surging over 5X or almost 442 percent. Also, in the last 5 years, the stock has advanced 162 percent.
However, the stock witnessed a bit of correction in the past 2 years. It has added around 20 percent in the last 1 year and 6.6 percent in 2023 YTD, giving positive returns in 3 of the 5 months in the current calendar year.
The stock gained 6.6 percent in May after a 8.3 percent jump in April. However, it lost 5.1 percent in March. Meanwhile, it rose 3.8 percent in February but fell 6.4 percent in January.
The stock hit its 52-week high of ₹604 on September 9, 2022, and its 52-week low of ₹418.23 on June 7, 2022.
Currently, the stock is just around 8 percent away from its 52-week high but has risen 33 percent from its 52-week low.
In the March quarter, the firm reported a 27 percent YoY jump in its consolidated profit after tax (PAT) at ₹183 crore versus ₹144 crore in the same quarter last year. Meanwhile, its consolidated revenue from operations jumped 19 percent to ₹2,889 crore in Q4FY23 as compared to ₹2,415 crore in the same period a year ago.
However, in 10 years, the company has seen multifold growth in its profit and revenue. The company's net profit has surged over 15x or 1,424 percent to ₹426.77 crore in FY23 from ₹28 crore in FY13.
Meanwhile, its revenue has also jumped 397 percent to ₹6,658 crore from ₹1,340 crore in FY13.
Nirmal Minda, CMD, Uno Minda Group, said, "The last fiscal year has been a year of rebound and robust growth for the automotive sector. He also mentioned that the company has outperformed the industry across all product categories on the back of its diversified product portfolio."
Post the March quarter earnings, brokerage house Geojit Financial Services retained its ‘buy’ call on the stock with a target price of ₹601, indicating an upside of 8 percent.
"Despite the near-term pressure due to a reduction in the underlying volume and macroeconomic headwinds, the company is actively increasing its kit value across all segments and outpacing the industry growth. UML’s strong balance sheet and quick ramp-up reflect higher revenue visibility on a medium to long-term basis. The stock has always traded at a premium due to its diversified product portfolio and new product offerings according to its changing trends. After the recent correction, the valuation looks attractive at the current level," it explained.
The brokerage expects a revenue CAGR of 19 percent over FY23-25E, factoring in the demand stability, diversification, and a superior product mix. Currently, UML is trading at its long-term historical average of 34x and Geojit believes, the stock will continue to outperform owing to its diversified portfolio and strong order win.