💰 Financial Performance

Revenue Growth by Segment

In Q2 FY26, the Information and Connected Systems segment (including wiring harness and instrument clusters) grew by 26% YoY, while the Mechatronics and Aftermarket segment grew by 12% YoY despite export headwinds. Total consolidated revenue for Q2 FY26 reached INR 1,535 Cr, a 19% increase from INR 1,290 Cr in Q2 FY25.

Geographic Revenue Split

The company derives approximately 85-87% of its revenue from the Indian domestic market. The remaining 13-15% is sourced from international exports to regions including South-East Asia (ASEAN), Europe, and North America.

Profitability Margins

Gross Profit Margin for FY25 stood at 37.8%, up from 37.1% in FY24. PAT Margin for Q2 FY26 was 5.5%, a slight decline of 25 bps from 5.8% in Q2 FY25, primarily due to higher finance costs which rose to INR 31 Cr from INR 11 Cr YoY.

EBITDA Margin

EBITDA margin for Q2 FY26 improved to 11.6% (INR 178 Cr) from 11.4% (INR 147 Cr) in Q2 FY25, a 22 bps expansion. The company has set a long-term target under Vision 2030 to achieve EBITDA margins of 12.5% or greater across all business verticals.

Capital Expenditure

The company invested INR 220 Cr in H1 FY26. It has a massive planned capital expenditure of INR 2,000 Cr over the next 4.5 to 5 years to support its Vision 2030 growth pillars, including new product launches like sunroofs and high-voltage EV components.

Credit Rating & Borrowing

The company holds a 'CRISIL AA-/Positive' rating (revised from Stable) and an 'India Ratings AA/Stable' rating. Net debt stands at INR 1,165 Cr with a net debt-to-equity ratio of 0.5. Interest coverage remains strong at over 8 times for FY25.

⚙️ Operational Drivers

Raw Materials

Specific raw material names and their individual percentage of total cost are not disclosed in the available documents; however, raw material costs totaled INR 956 Cr in Q2 FY26, representing approximately 62.3% of revenue.

Capacity Expansion

The company operates 32 manufacturing plants as of FY25. Planned expansion includes setting up new plants to support a 20-25% YoY growth target and specific new product lines like sunroofs (SOP Q1 FY27) and switches via the Toyodenso JV (SOP Q4 FY27).

Raw Material Costs

Raw material costs for H1 FY26 were INR 1,818 Cr compared to INR 1,559 Cr in H1 FY25, an increase of 16.6%. The company remains vulnerable to volatility in raw material prices and pricing pressure from OEMs, which can squeeze operating margins.

Manufacturing Efficiency

Operational excellence and a favorable product mix contributed to a 14% YoY growth in the Mechatronics division's performance. The company utilizes 32 plants and a workforce of over 18,000 to maintain scale.

📈 Strategic Growth

Expected Growth Rate

20-25%

Growth Strategy

Growth will be driven by five pillars: investment in existing businesses, export focus, premiumization (e.g., TFT clusters, smart keys), new product launches (sunroofs, high-voltage EV wiring), and deep R&D investment. The Flash Electronics collaboration specifically targets the high-growth EV power electronics and traction motor segments.

Products & Services

Key products include wiring harnesses, locksets, door handles, instrumentation clusters, sensors, die casting components, smart key systems, and EV components like traction motors and controllers.

Brand Portfolio

Spark Minda

New Products/Services

New launches include Sunroofs (SOP Q1 FY27), high-voltage EV wiring harnesses, and advanced switches through the Toyodenso JV (SOP Q4 FY27).

Market Expansion

The company is expanding its presence in the EV market and premium segments. It is also focusing on increasing its export footprint beyond the current 13-15% contribution.

Market Share & Ranking

The company is a market leader in India for two-wheeler security systems (lock and key sets) and a leading player in the wiring harness segment for 2W, 3W, and commercial vehicles.

Strategic Alliances

Key alliances include the Toyodenso JV for switches and a strategic collaboration with Flash Electronics for EV components (reported Q2 FY26 revenue of INR 446 Cr with 16.1% EBITDA margin).

🌍 External Factors

Industry Trends

The industry is shifting toward Electric Vehicles (EV penetration reached 7.8% in FY2025) and premiumization. Minda is positioning itself by launching TFT clusters and EV-specific power electronics to capture this shift.

Competitive Landscape

The company competes in the auto-component space against both domestic and global players, maintaining its edge through technological innovation and 9 engineering centers.

Competitive Moat

The moat is built on 315 patent filings (143 granted), 60+ years of promoter experience, and long-standing relationships with major OEMs. These are sustainable due to high switching costs in the wiring harness and security system segments.

Macro Economic Sensitivity

The company is highly sensitive to Indian rural demand, which drives the 2-wheeler segment, and macro-economic factors like GST rate reductions that enhance vehicle affordability.

Consumer Behavior

Rising consumer expectations for connected and secure vehicle access are driving demand for Minda's smart key systems and premium mechatronic products.

Geopolitical Risks

Trade barriers or economic slowdowns in Europe and ASEAN markets pose risks to the export business, which saw a setback in Q2 FY26.

⚖️ Regulatory & Governance

Industry Regulations

The company must comply with evolving automotive safety and emission standards. Recent GST rate reductions in the auto sector have positively impacted demand by improving affordability.

Taxation Policy Impact

The effective tax rate for H1 FY26 was approximately 26.8% (INR 44 Cr tax on INR 164 Cr PBT).

Legal Contingencies

The company is in the process of transferring unclaimed dividends and related equity shares from FY 2018-19 to the Investor Education and Protection Fund (IEPF) if not encashed by March 8, 2026.

⚠️ Risk Analysis

Key Uncertainties

Key risks include the volatility of raw material prices and the pace of EV adoption, which could disrupt traditional mechatronics product lines if the company does not transition fast enough.

Geographic Concentration Risk

High geographic concentration in India (85-87% of revenue), making the company vulnerable to domestic economic cycles.

Third Party Dependencies

Dependency on top 3 customers for 30-35% of revenue creates a risk if any major OEM shifts its sourcing strategy.

Technology Obsolescence Risk

The shift from mechanical locks to smart keys and from internal combustion engines to EVs presents a technology risk, which the company is mitigating through its 4% R&D investment.

Credit & Counterparty Risk

Receivables quality is generally high as the primary customers are major established OEMs, though specific credit exposure figures were not disclosed.