Uno Minda Ltd Q2 FY26 Earnings Analysis

- Expectation of continued robust growth across multiple product segments including switches, lighting, alloy wheels, and seating systems. - Full-year ramp-up of recently commissioned projects (four-wheeler lighting plants at Khed City and Gujarat, expanded two-wheeler alloy wheel plant at Supa, four-wheeler alloy wheel plant at Bawal) to support FY'26 growth. - Seating business expected to maintain growth momentum, aiming to double in five years. - Optimism in castings business aligned with SUV growth, with new capacity additions (e.g., Kharkhoda plant commissioning expected in Q2 FY'26). - Growth aided by healthy domestic demand, increasing exports, and emerging segments like sensors, radars, controllers. - Aftermarket and Spare Part Division sales showing strong growth, highlighting widening revenue streams. - Management expects margin expansion in medium term as ramp-up phase stabilizes. - Growth CAPEX planned around Rs. 1,300 crores to support expansion initiatives. - Industry volumes and model-specific growth will influence segments like lighting and alloy wheels.

- Uno Minda is optimistic about growth in FY'26, supported by strong domestic demand and ramp-up of recently commissioned projects including lighting plants (Khed City, Gujarat), and expanded alloy wheel plants (Supa, Bawal). (Page 9) - The company expects segment-wise growth in seating systems and aftermarket channels, alongside emerging segments like sensors, radars, and controllers. (Page 8) - Growth CAPEX of around Rs. 1,300 crore and maintenance CAPEX of Rs. 350-400 crore planned for FY'26 aiming to support expansion and efficiencies. (Pages 15-17) - Incentives from various state governments will aid competitiveness, though timing causes lumpiness in results; recurring incentives are expected with new projects. (Page 17) - FY’26 normalized EBITDA margins expected to remain stable (~10.7%) despite cost escalations, with PAT showing healthy growth, driven by higher volumes and operational efficiencies. (Pages 5, 8) - Management is confident of long-term value creation with continuous focus on cost optimization, new product development, and expanding portfolio in next-gen automotive solutions. (Pages 9, 13)

- Maintenance capex for FY'26 is expected around Rs. 350-400 crore. - Growth capex for FY'26 is approximately Rs. 1300-1350 crore. - Several ongoing expansion projects (around 13) across key programs, including: - Phase-1 of the four-wheeler alloy wheel plant at Kharkhoda (60,000 wheels/month), to be commissioned by Q2 FY'27. - Lighting manufacturing facility in Indonesia. - Die casting capacity expansion at Hosur. - Four-wheeler lighting plants at Khed City and Gujarat. - Expanded two-wheeler alloy wheel plant at Supa. - Four-wheeler alloy wheel plant at Bawal. - New Greenfield facility for high-voltage EV powertrain components under JV with Inovance Automotive; Phase-1 expected commissioned by Q2 FY'27. - A new plant for EV castings with Rs. 210 crore investment is planned. - Strategic investments include acquiring full control of Buehler Motor and FRIWO subsidiaries.

- As of June 30, 2025, Uno Minda's net debt to equity ratio stands at a healthy 0.34, with total debt at Rs. 2,228 crores, increased mainly due to expansion CAPEX and land acquisition. - The company has largely financed sustaining and growth CAPEX through business cash flows. - No explicit mention of new fundraising through additional debt or equity in the current quarter or near future. - Expansion CAPEX and project investments are being managed primarily through internal accruals and existing financing. - Regulatory approvals are ongoing for the Inovance JV, but no related capital raise is noted. - Overall, the firm appears to be managing liquidity and funding internally without immediate plans for fresh debt or equity fundraising.

- For the EV PowerTrain Inovance JV, Uno Minda has a purchase order (PO) in hand but cannot disclose the value due to dependence on customer vehicle production volumes. - The sunroof JV has started with one order and recently received a second model order, which is a carryover to another vehicle. - No new project is started without an order in hand. - Capacity expansion projects are ongoing with staggered investments; for example, the EV castings plant has a Rs. 210 crore planned investment. - Overall, there is optimism on order ramp-up, especially in lighting and casting businesses, supported by OEM demand and new customer wins. - The company is prepared to capture growth as industry volumes and application ratios improve across vehicle segments.