The Outperformers 2019

The Outperformers (1-10)

These companies have been ranked based on their stock's excess return over the Sensex for a five-year period

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Published 2 years ago on Aug 08, 2019 12 minutes Read

In Outlook Business’ third edition of The Outperformers, these are the companies that have managed to beat the market over a five-year period, creating significant value for their shareholders. 

Minda Industries

Our cars are getting more electric, safety and aesthetic components than ever. This is good news for one company — Minda Industries (MIL).Traditionally, a switching, lighting and acoustics parts supplier to marquee OEMs in India, this auto-components company has found success in consolidating various verticals and diversifying its businesses.  Its stock return was a stunning 91.62% over FY15-19. Its sales went up from Rs.13.89 billion to Rs.21.46 billion and profits from Rs.530 million to Rs.1.45 billion, in the same period, with CAGRs of 28% and 126% respectively.

The components player has been a pioneer in localisation through joint ventures and associations, but that also resulted in a fragmented corporate structure, which had to be consolidated. Between July 2015 and July 2018, a total of nine companies including new ones have been brought under the MIL umbrella. It led to unlocking of value, improving its topline and bottomline. 

A host of new business lines have been introduced in the past five years: alloy wheels, speakers, airbags, car parking assistance devices, aluminium die casting and moulding parts. While some of these bets were made based on emerging market trends, others were in response to the changing regulatory environment. There has been significant change in automotive safety and emissions regulations in India over the past five years, and the company responded to these very quickly.

In Q4FY19, MIL’s consolidated revenue grew modestly by 8.4% YoY, impacted by depressed OEM sales. But BS-VI norms, which are to be implemented by April 2020, will generate strong demand for certain products such as engine-related sensors, advanced filtration, seat belt reminders and increasing premiumisation through LEDs, alloy wheels and so on. MIL is strongly positioned to benefit from these changes as these products have higher margins and hence

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