Uno Minda shares jump over 3% as Jefferies initiates coverage with Rs 1,350 target price

Shares of Uno Minda surged over 3% to reach Rs 1,125.70 on the Bombay Stock Exchange following Jefferies' initiation of coverage with a 'Buy' rating and a target price of Rs 1,350, indicating a potential upside of 25%. Jefferies highlighted the company’s robust presence in the Indian auto sector, emphasizing its well-diversified, powertrain-agnostic portfolio, with approximately 90% of sales generated domestically. The brokerage projects impressive growth figures for Uno Minda, forecasting a 17% CAGR in revenue, 20% in EBITDA, and a 25% increase in EPS from FY26 to FY28, alongside a stable return on equity of around 20%. Notably, Uno Minda has consistently outperformed the overall market, showcasing a revenue and EPS CAGR of 23-25% from FY16 to FY26E, in stark contrast to the modest 4-5% growth in passenger vehicle and two-wheeler production. Jefferies also pointed out the company's significant market share in various segments, including a dominant 55% in switches and 45% in alloy wheels for passenger vehicles. Despite the seemingly high valuation of 42 times the estimated FY27 earnings, Jefferies believes it is justified considering the company's strong fundamentals. However, potential risks to this positive outlook include slower industry growth and delays in new capacity ramp-ups.