ICICI Securities has reiterated a BUY call on Uno Minda following a robust Q3FY26 performance that underscored the company’s ability to outpace industry growth amid structural tailwinds. Consolidated revenues rose 20% year-on-year, margins remained stable despite raw material inflation, and profit growth stayed resilient even after accounting for one-time charges. The brokerage highlights GST 2.0 reforms, rising kit value per vehicle, aggressive yet disciplined capex, and Uno Minda’s expanding EV and technology portfolio as key growth drivers. ICICI Securities values the stock at Rs 1,500, implying a 25% upside over the current market price.

ICICI Securities Reaffirms BUY With Rs 1,500 Target

ICICI Securities – Retail Equity Research has maintained its BUY recommendation on Uno Minda, assigning a 12-month target price of Rs 1,500 versus a current market price of around Rs 1,200. The valuation is anchored at 46x FY28E earnings, reflecting confidence in sustained earnings compounding, superior execution, and long-term structural advantages within India’s auto ancillary ecosystem.

Uno Minda’s Strategic Position in India’s Auto Ancillary Landscape

Uno Minda stands as one of India’s most diversified auto component manufacturers, with leadership positions across switches, lighting, horns, seating systems, and alloy wheels. The company derives nearly 93% of its revenues from OEMs, underlining its deep integration with major automotive manufacturers. Segmentally, FY25 revenues were well distributed across four-wheelers and two-wheelers, providing balance across demand cycles. This diversified portfolio has enabled Uno Minda to consistently grow faster than underlying vehicle volumes.

Q3FY26 Results Reflect Strong Operating Momentum

Revenue Growth Outpaces Industry:
During Q3FY26, Uno Minda reported consolidated revenues of Rs 5,018 crore, marking a 20% year-on-year increase, comfortably ahead of industry volume growth of roughly 16%.

Margin Stability Despite Cost Pressures:
EBITDA for the quarter stood at Rs 554 crore, translating into an 11% margin. This stability was achieved despite higher aluminum prices, which particularly impacted the casting segment.

Profit Growth Remains Resilient:
Reported profit after tax came in at Rs 277 crore, up 19% YoY, even after absorbing a one-time exceptional charge of Rs 28 crore related to new labour code implementation.

Segment Performance Highlights Operating Depth

Uno Minda’s growth was broad-based across verticals:

Switches: Revenues grew 19% YoY to Rs 1,241 crore, contributing one-fourth of consolidated turnover.

Lighting: Sales rose 15% YoY to Rs 1,129 crore, supported by increasing LED penetration in electric two-wheelers.

Casting & Alloy Wheels: The segment delivered 26% YoY growth, reaching Rs 971 crore, aided by strong demand for alloy wheels.

Seating: Revenue increased 32% YoY to Rs 361 crore, driven by bus seating and export recovery.

Other Products: Sensors, ADAS modules, controllers, and EV systems pushed this segment to Rs 1,106 crore, up 19% YoY.

GST 2.0 Reforms Provide Structural Demand Support

ICICI Securities attributes part of the demand resilience to GST rationalization, which has standardized auto component taxation at 18%. This reform has improved pricing transparency, boosted aftermarket competitiveness, and supported stronger replacement demand. Passenger vehicle sales during Q3FY26 hit record levels, benefiting suppliers like Uno Minda that operate across multiple vehicle categories.

Rising Kit Value Strengthens Long-Term Growth Visibility

Uno Minda continues to increase its content per vehicle, with kit value now exceeding 10% of average vehicle selling prices. Management’s strategy of premiumisation, deeper OEM integration, and product complexity has enabled the company to grow 1.5–2x faster than industry volumes. This structural lever remains central to ICICI Securities’ long-term growth thesis.

EV and Technology Portfolio Adds Asymmetric Upside

Uno Minda’s EV-agnostic strategy positions it to benefit regardless of powertrain outcomes. The company has already commercialized EV chargers, controllers, ADAS modules, and electronics systems. In electric two-wheelers, potential kit value is estimated at Rs 37,600 per vehicle, compared with roughly Rs 12,000 in ICE models. Its Innovance joint venture for high-voltage powertrains is progressing toward commissioning in FY27, adding optionality to earnings beyond core auto components.

Capex Discipline Anchored to Customer Validation

The company is currently executing 11 capex projects with a cumulative outlay of Rs 3,155 crore, including a Rs 764 crore greenfield alloy wheel facility with 1.8 million wheels per annum capacity. Importantly, management has reiterated its policy of avoiding idle capacity by tying expansion phases to confirmed OEM demand, reducing balance-sheet risk.

Financial Trajectory Supports Premium Valuation

ICICI Securities projects a 15% revenue CAGR and nearly 26% PAT CAGR over FY25–28E, supported by operating leverage, scale benefits, and easing leverage metrics.

Key Risks Investors Should Monitor

Margin Volatility: Sustained spikes in aluminum or commodity prices could temporarily pressure margins due to pass-through lags.
OEM Dependence: A sharp slowdown in domestic auto demand could impact growth, given the company’s OEM-heavy revenue mix.

Investment View: Execution Strength Justifies BUY

ICICI Securities believes Uno Minda’s consistent execution, expanding technology footprint, and favorable regulatory environment outweigh near-term margin fluctuations. With improving return ratios, declining leverage, and a strong EV pipeline, the brokerage maintains a BUY rating with a Rs 1,500 target price, representing compelling upside for long-term investors willing to pay for quality and visibility.