The Outperformers 2018


A mix of consolidation and diversification is proving to be a good growth formula for Minda Industries

Photographs by Vishal Koul

Nirmal Minda has an amiable air to him. As he walks from his Manesar corporate office to the adjacent switches factory, he greets everyone he meets on the way. The switch factory has all the familiar two and four-wheeler parts being inspected by the workforce on the production lines. This plant has been churning out switching systems for decades, and continues to bring home the bread and butter for the Minda group. But the affable chairman smiles and says, “An old cow can only be milked so much,” as we quiz him on the rationale for the shake-up at Minda group over the past four years. 

The shake-up involved consolidating the fragmented group companies around Minda Industries (MIL), the sole listed entity, and adding new businesses to the Minda group which had largely been living off its legacy in automotive switches and vehicle horn for decades.

The result of such bold calls is already showing up. Revenue has shot up from Rs.17 billion in FY14 to Rs.45 billion in FY18 (see: Racing ahead). During the same period, the Ebitda margin has more than doubled from 5.1% to 11.9% and group PAT on a consolidated basis has jumped from Rs.70 million in FY14 to Rs.2.56 billion in FY18. Today, Nirmal Minda’s proverbial ‘old and ageing cow’ has transformed into a ‘Kamadhenu’. 

Unlocking value

Four years ago, if one looked at MIL’s stock, its value appeared subdued. The company’s market cap atRs.2.5 billion in July 2013didn’t reflect what it really was — a market leader in two niches with a formidable client base. Pre-restructuring, MIL’s financials failed to capture the value locked in Minda group’s several joint ventures with foreign players, which were the technological backbone of the group. Admits Minda, “From the stock market point of view, for a potential shareholder, there was ambiguity about the structure and its value.” 

There was a reason why the structure stayed that way for years together. Explains group CFO Sudhir Jain, who has been associated with Minda for more tha


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