- 26 Aug 2022
- ICICIdirect Research
ANNOUNCES FRESH CAPEX SPENDS TO EXPAND ALLOY WHEEL & AUTOMOTIVE SWITCHES BUSINESS
UNOMINDA - 1043 Change: -15.85 (-1.50 %)News: In regulatory exchange filing Uno Minda (erstwhile Minda Industries) has notified fresh capex spend amounting toRs300 crores to expand manufacturing capacity. Out of aboveRs190 crores would be done in 4W Alloy plant at Bawal Haryana & would be in two phase with first phase of 30,000 wheel/month intended to be commissioned in December 2023 and remaining in June 2024 &Rs110 crore would be spend to expand capacity at Automotive Switches plant (4-W) in Farrukhnagar (Gurugram, Haryana).
View: The company is expanding aggressively in the alloy wheel segment with recent expansion just completed at its Bawal Plant in Q4FY22 (capacity increased by 60,000 wheels per month to 1.8 lakh wheels per month) and while expansion ongoing at its Gujarat plant (30,000 wheels per month). With this capex, capacity would further increase by 60,000 wheels per month to 2.4 lakh wheels per month. During Q1FY23 4W alloy business T/O was ~Rs300 crores. Automotive Switch division forms ~30% of top line with new plant in this domain expected to be operationalized by September, 2023. We believe the announced capex bodes well for the company and shall help it sustain its outperformance to user industries.
Impact: Positive.