Minda Corp Management Discussions
Global economic overview
In 2022, the global economy saw a mixed landscape characterized by a combination of favourable and challenging factors. According to the International Monetary Fund (IMF), the global economy expanded by 3.4% during the year. Notably, emerging markets and developing economies acted as key contributors to this growth, driven by robust demand for exports, rising commodity prices, and supportive monetary and fiscal policies implemented in these regions. These factors collectively propelled the expansion of emerging markets and developing economies, bolstering global growth.
However, the global economy also faced headwinds that posed challenges. Persistent trade tensions between the developed economies and geopolitical instability were a prominent factor. Inflationary pressures mounted across the globe due to increasing commodity and energy prices. Moreover, political uncertainties in key economies added further complexity and unpredictability to the global economic landscape.
However, the central banks monetary policies are expected to bear fruit, leading to a decline in global inflation. Emerging markets and developing economies (EMDEs), including India are powering ahead in many cases, with growth rates expected to witness a significant upsurge this year.
Outlook
There are positive signs that indicate a slow yet steady recovery from the pandemic-induced shocks and supply-chain bottlenecks. Growth rates Q4FY23 vs Q4FY22 have increased from an expected 2.8% in 2022 to 4.5% in 2023, which suggest that growth in many emerging markets and developing economies is now accelerating.
Strong demand from emerging markets and developing economies presents a potential avenue to offset the slowdown experienced in advanced economies. These regions continue to exhibit resilience and offer opportunities for growth through robust domestic consumption and export activities. Additionally, the continuation of accommodative monetary policies in these countries can act as a catalyst for economic expansion, promoting investment and consumption.
Indian economic overview
2022-23 was a landmark year for the Indian economy. While the global business environment faced slowdown on the back of high-interest rate environment. Indias growth continues to be resilient with it becoming the worlds fifth largest economy. The strong growth of 7.3% was driven by robust demand from both domestic and international consumers, supported by a favourable business environment. India has also seen significant growth in its manufacturing sector in recent years. The government has launched several initiatives like to promote manufacturing, including the "Make in India" campaign. The country has invested heavily in infrastructure development in recent years, including construction of highways, airports, and ports. These investments have helped to improve connectivity and logistics, making it easier for businesses to operate in the country. However, the economy encountered challenges, including rising inflation and supply chain disruptions. Though the countrys inflation is largely tied to the global supply chain disruption, the RBI increased the repo rate by 250 basis points FY23 to control it.
In summary, the Indian economy encountered a blend of favourable and challenging conditions in 2022. As the analysis extends to 2023, it reveals a landscape of risks and opportunities that hinge upon effective policymaking. Navigating these challenges while capitalizing on available opportunities will play a pivotal role in shaping the trajectory of the Indian economy in the coming year.
Outlook
The Indian economy growth is underpinned by several factors that will contribute to its expansion. Notably, strong domestic demand is expected to play a pivotal role, driven by factors such as rising incomes, low unemployment rates, and a favourable credit environment. Additionally, the Indian government has implemented measures to stimulate investment, including increased public spending on infrastructure, regulatory simplification, and tax incentives for businesses. Furthermore, the Indian economy is poised to benefit from robust exports, buoyed by rising global demand for Indian goods and services as well as the depreciation of the rupee.
However, it is important to acknowledge the risks that could potentially impact the economy in 2023 are rising inflation and higher interest rates. These risks have the potential to drive up energy and food prices and disrupt global supply chains, thereby affecting the Indian economy.
To summarize, the economy is expected to sustain its growth in 2023, supported by various factors. However, risks such as inflation and geopolitical uncertainties require careful management by policymakers.
Industry overview
Indian Automotive Industry
Industry Overview
The Indian automobile industry has emerged as a key indicator of the countrys economic performance and technological advancements. With its robust presence in heavy vehicles manufacturing, India has established itself as a global leader, ranking first in 2 wheeler and tractors, second in bus manufacturing, third in heavy truck manufacturing and fourth in passenger vehicle market. With an estimated worth of over $222 billion, the Indian automotive industry contributes 8% to the countrys total exports and accounts for 7.1% of its GDP.
The Indian automobile industry ended on a positive note in FY23, emerging as a success story by bouncing back from the challenges posed by the pandemic, subdued demand, and supply chain constraints.
The PV segment recorded its highest production of over 4.6 million units in FY23, with two primary factors driving the growth - strong demand and relaxation of supply chain constraints leading to a rise in production. Consumer preference and demand in the PV segment are increasingly skewed towards SUVs, which have witnessed a YoY growth of over 30%. However, the sale of compact cars has seen minimal growth, and the sedan segment has performed poorly with negative growth in sales volume.
The CV segment saw a major upturn in sales volume in FY23, driven by robust demand and growth in major economic activities, including infrastructure and construction industries.
Tractor demand across markets recorded consistent strong production volume in FY23 at 1.1 million units, up 12% YoY. The segment is seeing some saturation but is expected to pick up ahead and grow in low single digit in FY24.
Indian 2W industry witnessed strong growth in FY23 growing by 9.2% over FY22. In FY23, total production of 2W grew to 19.5 Mn. This industry witnessed its peak in terms of production volume in FY19, and then had 2 years of low production volumes mainly due to sluggish demand due to COVID and other economical parameters.
But now the demand in 2W is strong and going forward also 2W industry is expected to grow consistently. The demand is expected to be led both in mass-market segment and medium to high end segments.
The electric vehicle (EV) segment showed significant growth potential, with major companies entering the market and new models being introduced across vehicle segments. The adoption of EVs is gaining prominence as the focus shifts toward sustainable transportation. 2 wheeler EV industry reached a penetration of 5% - 6% in FY23 and is expected to reach penetration of 40% - 50% by 2030. With this penetration India is expected to produce more than one crore EV 2 wheelers per annum by 2030. Despite strong growth in EVs, the ICE segment was largely unaffected.
Despite few headwinds related to high borrowing cost, uncertainties in inflation etc. Indian Automotive industry is expected to perform well across segments. The key growth drivers for this industry remains high domestic demand, favorable consumer sentiments, high infrastructure spend by govt and premiumisation in Vehicles (which is offering varied choices to the consumer) which is expected to bring growth across segment.
100% FDI is permitted through the automatic route in automotive sector.1
Government initiatives
The Government has rolled out numerous initiatives to encourage the adoption of Electric Vehicles (EVs) in a multilayered mobility system. It has launched a Production-linked incentive (PLI) scheme by investing USD 10 billion to enhance the domestic manufacturing of displays and semiconductors. The Government is also providing an impetus to the EV market by investing H 10,000 crore in the Faster Adoption and Manufacturing of (Hybrid) Electric Vehicles (FAME-II) scheme. Likewise, Bharat Stage VI (BS VI) emission standards for vehicles have been announced by the Government. These measures are expected to substantially reduce carbon emissions and traffic pollution. In addition to EVs, the Government has allocated funds to develop smart cities with integrated public transit systems.
Company overview
Minda Corporation is a leading manufacturer of automotive components in India with significant global footprint. The Company was founded in 1985 and is the flagship business of Spark Minda, which was a constituent of the former Minda Group. It has 34 Plants and offices in India and overseas. The Company has strategically placed itself at multiple locations to remain closer to the customer for better servicing.
The Company offers a diverse range of products including Mechatronics, Information and Connected Systems, Plastics and Interiors, Aftermarket, Electronics Manufacturing Excellence and Spark Minda Green Mobility.
With a formidable talent pool, comprising workforce of more than 16,000 individuals, the Company is engaged in supplying auto components to various vehicle segments like 2 Wheelers, passenger vehicles, commercial vehicles, and off-road vehicles.
Minda Corporation remains steadfast in its commitment to serving different vehicle segments within the automobile industry. The Group has shown remarkable growth on Y-o-Y basis with revenue growing by 45% to H43,001 million in FY23 verses H 29,759 million in FY22. This can be attributed to the strong and diversified portfolio, Product Premiumisation across business verticals, consistently increasing kit value, focus on in house research and development, robust launch pipeline that drives sustainable future growth and strong order book.
For India, 2023 will be known as the year for "safer cars" as the government has lined major regulations which has kicked in from 1st April 2023 onwards. Spark Minda keeps its laser sharp focus on the changing regulatory norms and have successfully inducted change to OBD2 norms.
The Companys vision is to become a dynamic, innovative and profitable global automotive component manufacturer that is recognised as the preferred supplier and employer, creating value for all stakeholders.
The Company has entered into a Technology Licence Agreement (TLA) with DAESUNG, a prominent automotive electronics company based in Korea, with the aim of bringing the Next Gen Advanced Driver Assistance System (ADAS) solutions to the Indian automotive market. This partnership places Spark Minda ahead of the technology curve by providing localised ADAS solutions for the Indian market through cutting-edge technology offered by Daesung Eltec combined with Spark Mindas capabilities.
Furthermore, through this collaboration, Spark Minda has acquired a competitive edge by offering customised ADAS solutions for the Indian market. This falls in line with the Companys objective of becoming a major provider of next-generation ADAS solutions by integrating the latest technologies into its operations.
In addition to the ADAS partnerships, the company also entered into Technology License Agreement (TLA) with LocoNav for white-labelling of Telematics Software for both
Web & Android/iOS platforms. Spark Minda will integrate LocoNav developed software with its inhouse developed telematic devices to provide OEMs with a complete solution. This exclusive collaboration will enable Spark Minda to be ahead of technology curve with customised solutions to suit Indian OEMs.
As part of the alliance, LocoNav will be the technology partner for telematic systems to Spark Minda and shall provide with white labelled software and would also assist Spark Minda in software customizations and mobile application user interface. With this Spark Minda aims to strengthen their technological advantage and concentrate on providing clients with products and system solutions under one roof.
Financial performance
Minda Corporation reported yet another year of resilient performance that outperformed the industry. The Company generated revenue from operations of H 43,001 million, marking an increase of 45% on an annual basis. The Company has recorded a 57% growth in EBITDA from H 2,946 million in FY22 to H 4,615 million in FY23. The Companys EBITDA margin stood at 10.7%, which has improved by 83 basis points from FY22. The Company delivered consistently double double-digit EBITDA margin for the 11th consecutive quarter*. In addition to this, Spark Minda has registered H 2,845 million Profit after tax for FY23.
*barring Q1FY22 impacted by covid
The Mechatronics and Aftermarket division of the Company generated improved revenue of H 20,611 million in FY23 vs H 16,873 million in FY22, attributable to an increase in share of business and increasing kit value on the back of product premiumisation. The Mechatronics division recorded a growth in EBITDA margin from 12.3% in FY22 to 13.5% in FY23.
The Information and Connected Systems division pegged revenue of H 22,390 million in FY23 vs 12,886 million in FY22 with an increase in EBITDA margin from 6.7% in FY22 to 8.2% in FY23. The growth in revenue was supported by demand from Domestic market. Margins in the division are improving steadily due to component localisation.
The Companys India operations have maintained their dominance, accounting for 84% of the revenue. India is followed by Europe and North America, which is roughly 8%. Additionally, South east Asia contributing 8% to the revenue. Segment wise the Two and three-wheeler segment contributes approximately 44% of the revenue while PV, CV and aftermarket contributing 14%, 30% and 12% of the revenue respectively. By business vertical the Mechatronics and aftermarket represents around 48%, while information and connected systems contributes about 52% of the revenue.
Mechatronics
The Companys core business involves the production of a range of security products, including lockset both mechanical and Keyless, mechatronics handles, immobilisers system, compressor housings, aluminium die-cast, starter motors & alternators. Further, to capitalise on the opportunities arising due to the rapid growth of electronic components in automobiles, the Company continues to concentrate on creating solutions that offer enhanced safety and convenience. It prioritises creating technologically advanced products that make a meaningful contribution in order to enhance customer satisfaction and drive operational excellence. During the year the division won 101 awards and accolades at various big forums like CCI, QCFI, ACMA and various customer awards.
| Product portfolio | Key divisions/ companies | Key customers | No. of plants | Plant locations |
| Ignition Switch cum Steering Locks, Smart Key Systems, Mechatronics Handles and Immobiliser System, Die Casting Components, Starter Motors and Alternators | Security System | Bajaj Auto, Ashok Leyland, TVS, Yamaha, Honda Motors & Scooters, Suzuki Motors, Hero MotoCorp, Triumph, Ola Electric, JCB, M&M etc. | 4 | Pune, Noida, Pantnagar, Aurangabad |
| Die-Casting | Bajaj Auto, BorgWarner, Endurance, Garrett Motion, Keihin India, M&M, Brembo, Turbo Energy etc. | 3 | Pune, Greater Noida | |
| Starter Motors and Alternators | Escorts, Magneton, Information Technology Laboratory, Tractors and Farm Equipment (TAFE), CNH | 1 | Bawal | |
| ASEAN Business | Yamaha, Suzuki, Kawasaki, Piaggio | 2 | Indonesia, Vietnam | |
| MINDA VAST Access System Limited | Maruti Suzuki, Tata Motors, Mahindra & Mahindra, Nissan | 2 | Pune, Manesar |
Security system
Spark Minda is a leader in the segment of lock and key sets for two-wheelers in India. Its security system division is a major supplier in Electronic, Mechanical and Connected
Vehicle access control for two-wheelers (gasoline and electric) and off-road vehicles, with a market share of more than 40% for the domestic 2W market.
The Company serves all the major Original Equipment Manufacturers (OEMs) globally with a comprehensive product line that ranges from mechanical to electronic access control systems. For improved vehicle security, the Company produces locksets with a variety of key applications, including conventional keys, two-track keys, four-track keys, snake-biting keys and smart keys.
Change in technology trends, regulatory mandates, rapid changing customer expectations, need for differentiating products by OEMs and increasing cost reduction pressures from OEMs, the division has further intensified its focus on In-house Design and Development capability for Electronic
& Mechanical Security Systems, with focus on product Innovation, reliability & first time through approach will further increase to achieve zero defects in complete product life cycle – Zero defect initiative drive started across the group and Zero defect product policy will be adopted as our winning mantra.
Strong patent portfolio
The Companys relentless focus on Intellectual Property Rights (IPR) creation is the prime reason for the strength in the patent portfolio. The patents portfolio till FY2023 stands tall at 130 patents in this division.
World class in-house R&D facility - SMIT
The investment in the state-of-the-art, in-house R&D facility Spark Minda Technical Centre (SMIT) in Pune and Bangalore continues to yield rich dividends, in terms of enriching the IPR portfolio and enhancing product line.
Proximity to Customers
The facilities are strategically located in close proximity to customer locations, providing us with an inherent edge by saving on valuable time and transportation costs. The Company has maintained a firm grip on market share in the domestic market and continues to show good growth in exports. The focus is to expand this division by
• Further market penetration in domestic, as well as International
• Product development i.e. Mechanical to Mechatronic
• Market Development i.e. entry into ATV/Off-Road in various overseas market and also into E-Bike/ERickshaw
• Expanding SOB with existing domestic & global customers by o Early engagement with the customer to understand the value attributes o Providing differentiated products which are high in content.
Die-casting
The Die-casting division of the Company is a key producer of Aluminium and Zinc die-cast and manufactures components for the global automotive and non-automotive industries. This division constitutes 17% of the Companys total revenue. In addition to prototyping, tool design and manufacturing, casting simulation, core making, die casting, shot blasting, powder coating, assembly and multi-process foundry services, the Company through this division also offers end-to-end solutions to its clients.
The Company manufactures following products through its state-of-the-art manufacturing facilities:
GDC: Upper Bracket and Handle holders for 2W, Compressor Housings for Turbochargers, Engine Mounting Brackets for 4W, Intake Manifolds, Brake Callipers, Tandem Master Cylinders for brake application, Housings for steering mechanism, Thermo Housing for water and Oil pump application
LPDC: Cylinder Heads and Upper Bracket for 2W
HPDC: Master Cylinders for 2Wbrake application, Seal plates for Turbochargers, Starter motor cover, Head Cover
Zinc: Ignition lock, Fuel Tank cap parts for 2W and 4W Gravity Die Casting (GDC), Low Pressure Die Casting (LPDC), High Pressure Die Casting (HPDC) and Zinc Hot Chamber Casting
As the Company has a promising export market, it will continue to focus on exports to generate new revenue streams, boost profitability and expand its current manufacturing capacity. The Company has received orders for EV die casting products from both export and domestic OEMs.
Going forward, the Company intends to further diversify its offerings into the EV space as light weighting plays an important role into an EV vehicle. The Companys rich expertise and knowhow will assist in this diversification. It will be a strategic move towards strengthening the Companys core competencies.
Spark Minda is also helping the OEMs and Tier 1 supplier to meet the changes in regulations, which are taking place in fuel injection, braking and emission system. To enhance the competency, the division is implementing automation in a phased manner, optimizing machining cost and other cost including lowering the raw material cost.
Starter Motors and Alternators
The Companys Starter Motors and Alternators division caters to several OEM clients domestically and internationally. For the construction of starter motors with offset Gear-Reduction technology (GRS) is employed. These Starters built on GRS technology are fast replacing Direct-Drive technology Starter motors in various segments. This is because GRS Starter motors are lighter and more compact in dimensions compared to Direct-Drive motors. This technology delivers high specific torque and starting speed and a faster start ability for the engine, making it the best choice for OEM clients of late.
Alternators are traditional, ventilated variants that find application in various industries, including stationary engines, farming machinery and tractors. These alternators are built with the utmost attention to ensure output stability for continuous battery charging while operating in a variety of working conditions and applications.
To increase profitability, the division is focused on product and value engineering. The engineering team is reducing product development time and expense by using Virtual Product Validation during the product development process. It is continuing to develop products with weight optimisation that will help it save material.
The Company has installed multiple testing activities that will support in offering best in class products at the best value price performance. Salt Spray Chamber, Engine Control Unit, Hot Chamber and Thermal Shock Chamber are to name a few.
ASEAN business
The Companys ASEAN business is conducted through two locally incorporated subsidiaries namely PT Minda
Automotive (Indonesia) and Minda Vietnam Automotive Co. Ltd. These Companies cater to the large and growing markets in the ASEAN region, with Greenfield manufacturing facilities in Indonesia and Vietnam. This helps the Company to live up to its core philosophy of being ‘near to the customer and ‘supplying the best quality products. With the plants, the Company supplies not only to OEMs in Indonesia, Malaysia, Vietnam, Singapore, Philippines, China, Japan, etc., but also to OEMs in distant Brazil and Columbia. It is a testimony to the success of the vision of the Company.
The Companies supply a wide range of products to its customers including Ignition switch (with or without Magnet Shutter), Fuel Tank Cap, Side Cover Lock, Seat Latch / Locks. It remains a one-stop solution for Lock, Wiring Harness, Speedometer, EV and other group products from one facility in ASEAN. During the year, the Company continued its philosophy of investing in automation and tools to ensure early vendor involvement, develop new channels for raw material procurement and develop best products for the business. The technological capability of the Companies is backed up by a strong R&D teams in India, with a design office in Japan.
MINDA VAST Access System Limited
Minda VAST Access Systems Private Limited is a 50:50 joint venture between VAST, USA and Minda Corporation Limited and is headquartered at Pune. VAST, USA is a well renowned global supplier of security / access control products for the motor vehicle industry and is one of the global market leaders in the security / access systems. VAST is an alliance of three organizations and related operating entities that is directed by a single management team in order to effectively serve global customers. The organizations of VAST are WITTE Automotive from Velbert, Germany; STRATTEC Security Corporation from Milwaukee, WI; and ADAC Automotive from Grand Rapids and MI, USA.
With new technologies, focus on electric vehicles, autonomous driving, the automotive industry is witnessing structural and rapid changes. It is imperative to meet these challenges with innovation across product segments and conceptualize, design, develop new and unseen products, components and systems. The Company has been successful in moving with the changing trends, i.e. shift from Mechanical to Mechatronics; and developing products with the help of SMIT and VAST like bracket less handles, electric steering column locks, power lift gates. The JV also has state of the art robotic paint shop. Inhouse tool making capabilities along with product testing and validation enhances the core engineering capabilities of the company. New product development and penetration to new customers - both in the domestic and global markets, remain the key strategies for growing this business.
Information and Connected Systems
The Company has an extensive range of high-quality products that are tailored to meet the needs of major Indian and international Original Equipment Manufacturers (OEMs). The products in this business vertical includes wiring harness, instrument clusters (speedometers), junction boxes, sensors like location, temperature, speed and Exhaust Gas Temperature (EGT) sensors.
| Product Portfolio | Key divisions/ companies | Key customer | No. of plants | Plant locations |
| Wiring Harness, Connectors, Terminals, Components; Instrument Clusters, Dashboard, Sensors like speed, temperature, | Wiring harness | TVS, Ashok Leyland, Bajaj Auto, Honda Motorcycles & Scooters, Hero Moto Corp, Piaggio etc. | 10 | Pune, Greater Noida, Pillaipakkam, Kakklur, Murbad, Pithampur, Haridwar, Mysore, Hosur |
| position, pressure, exhaust gas etc; | Component | In-house Divisions, JV Companies | 1 | Greater Noida |
| Minda Instruments Limited | Tata Motors, M&M, Bajaj Auto, TVS, Daimler, Stellantis, Ashok Leyland, HMSI etc. | 2 | Pune, Chennai |
Divisions
Wiring Harness
The Wiring Harness division strives towards enhancing the wiring harness designs through cost-effective engineering and boost labour productivity. These factors give an impetus to offer top-tier and dependable products at reasonable prices. The division produces a wide range of wiring harnesses, battery cables, wiring sets, connectors and terminals. Furthermore, the division offers a complete solution from design to successive delivery to their customers with competence. Additionally, it offers connectivity solutions for off-road vehicles and every sector of the automobile industry.
During the year under review, the Company has achieved a milestone by launching products on wiring harnesses that comply with OBD2 norms for two-wheeler Original Equipment Manufacturer (OEM) customers in India. On top of that, the division has also manufactured EV wiring harnesses for a large domestic tractor manufacturer and a key global technology OEM. The manufacturing in the wiring harness division is focused on innovation, cost-cutting and overhead reduction in addition to delivering items of the finest calibre.
Minda Instruments Limited
Minda Instruments Limited (formerly known as Minda Stoneridge Instruments Limited) is a wholly owned subsidiary of Minda Corporation Limited. It was earlier, a joint venture between Minda Corporation Limited and Stoneridge Inc, USA, a leading manufacturer of electronic instruments and automotive sensors which was acquired entirely by Spark Minda in FY22. The strategic move is in line with the companys vision to grow in advanced technological products i.e. Sensors & Clusters.
It also gives a free access to highly growing global market of clusters and sensors. Moving ahead, the company is looking to grow in connected clusters/cockpits, 7+ inch screen space, providing more features to the end consumers (with special focus in PV space). During the year under review, the company added more EV customer. The company believes, in future one of the key drivers of growth for the cluster segment will be the product premiumization like 7 inches plus digital TFT which enhances consumer experience and meet their aspirational needs along with helping in customer penetration. During the year company got a major breakthrough in this space with TFT cluster order from a key OEM in India. The facility has all of the cutting-edge equipment, testing, and support facilities needed to produce any sort of instrument in accordance with customer specifications.
Furukawa Minda Electric Private Limited
Furukawa Minda Electric Private Limited (FME) is a 75:25 joint venture between Furukawa group of Japan and Minda Corporation Limited. Furukawa Minda Electric Private Limited has over ten years of experience in the Indian automotive industry and is a reputable manufacturer of wiring harnesses and steering roll connectors for passenger automobiles used by Japanese four-wheeler clients for their airbag systems. In addition to the Wiring Harness, the Company is a pioneer in Indias Steering Roll Connectors (SRC) technology. The company is enthusiastic about its future growth prospects given the boost in demand and tightening of emission control norms.
Plastic and Interior
The Plastic and Interior division was established in 2017 after acquiring expertise in value added plastic technologies like kinematics and light-weighting from Minda KTSN. The division includes a vast product range like air vents, glove boxes, centre consoles, cup holders, ash trays, louvers, oil slumps, cylinder heads, and battery trays. The company has deployed unique methods for vehicle construction and weight reduction in order to improve vehicle performance. With the successful localisation of technology, the company revenue growth has outperformed the industry growth multiple times. The company also added futuristic air - vent designs while exploring ways to incorporate similar designs into other platforms. Already in a rapid growth phase, the interior plastic division is presented with tremendous growth opportunities with emphasis on light weighting and feature improvements that have led to a rise of use of plastics in vehicles.
| Product Portfolio | Key divisions/ companies | Key customers | No. of plants | Plant locations |
| Air Vents, Glove Boxes, Centre Consoles, Cup Holders, Ash Trays, Louvers, Oil Slumps, Cylinder Heads, And Battery Trays | Plastic & Interior | Mahindra & Mahindra, Maruti Suzuki, Cummins | 2 | Greater Noida, Gujarat |
Aftermarket
The Company has a strong presence in the Aftermarket space as it markets and sells all products manufactured by its group companies and also offers certain outsourced products. The products include locks, lubricants, filters, clutch plates, bearings, wiper blades, Brake Shoes, and cables at segments including 2W, 3W, PV, tractors, CV and off-road vehicles. The Company continued to invest in strengthening its brand profile in the segment along with a strong focus on developing its dealer network. With a robust all-India network of more than 500 business partners, the Company has access to over 10,000 retail network in the country. The Company rolled out new promotional schemes for weaker products in various regions to beef up the product sales in these regions. Further, the Company is steadily building its presence in the aftermarkets in countries like Sri Lanka, Nepal, Bangladesh, Africa and Latin America.
Last year, Spark Minda forayed into B2C space with launch of 17 helmet models with 145 variants in the Indian retail market. The company added more than 50 distributors in the last year and plans grow its network to 200 distributors in the coming year. Apart from this the company also launched 1500 fiber parts that is Plastic-molded, painted components for two-wheelers to meet the growing demand of 2W riders across the country. This number is targeted to increase to 2400 in the next two years, representing the largest range of fiber parts available in the country. Apart from this, the Company also enhanced its warehousing capacities with the aim to cut down fulfilment time from 25-30 days to a reasonable time period and taking the satisfaction levels among customers. Automation is another area where the business will focus along with implementing Power BI tool to get data till the city level.
Spark Minda Green Mobility Systems and Electronic Manufacturing Excellence
Spark Minda via its 100% wholly owned subsidiary Spark Minda Green Mobility Systems (SMGM) focuses on products specifically catering to the EV Segment i.e Battery Chargers, DC-DC Converters. Apart from this the division also focuses on high tech products like Telematics and Intelligent
Transport System (ITS). SMGM is also in the advanced stages of development of products such Battery Management System (BMS), Motor Controllers and VCUs etc. During FY22 the Spark Minda Green Mobility acquired 26 percent equity stake in charging solutions start up EVQPOINT Solutions for exclusive technology and manufacturing partnership for battery chargers and EV supply equipment.
Electronic Manufacturing Excellence helps deliver interdisciplinary products in the connected mobility and IoT space such as PCBs assembly. It is the Companys in-house R&D centre SMIT, together with the acquisition of a start-up in 2018, EI-Lab, that has enabled it to develop the latest devices and solutions, bringing stateof- the art technologies to the automotive linked mobility management devices and solutions domain.
In FY23 the company also entered into TLA with Daesung Eltec, a prominent automotive electronics company based in Korea, with the aim of bringing the Next Gen Advanced Driver Assistance System (ADAS) solutions to the Indian automotive market for Passenger Vehicle, commercial vehicle and off road vehicle segment. This partnership places Spark Minda ahead of the technology curve by providing localised ADAS solutions for the Indian market through cutting-edge technology offered by Daesung Eltec combined with Spark Mindas capabilities. The company also has a TLA with Israel based company Ride Vision for two-wheeler ADAS.
Additionally, in FY23 Spark Minda has entered into a Technology Licence and Agreement (TLA) with LocoNav for white-labelling of Telematics Software for both Web & Android/iOS platforms. The company will integrate LocoNav developed software with its inhouse developed telematic devices to provide OEMs with a complete solution. As part of the alliance, LocoNav will be the technology partner for telematic systems to Spark Minda and shall provide with white labelled software and would also assist Spark Minda in software customizations and mobile application user interface.
The vertical will enable the company to remain ahead of technology curve with customised solutions to suit Indian OEMs and also enables it to capitalise on the shift towards electric mobility and strengthen its position as a one stop shop as a comprehensive solutions provider.
| Product portfolio | Key divisions/ companies | Key customers | No. of plants | Plant locations |
| DC-DC convertor, Battery charger, Motor controller, Intelligent Transport system, Telematics, Connected Clusters, MFECU, Vehicle Control Unit (VCU) | Spark Minda Green Mobility Systems and Electronic Manufacturing Excellence | Ashok Leyland, Ampere, Polarity, Etergo, Ola Electric, Bajaj | 1 | Pune |
| Rod Antenna, Micro Pole Antenna, Shark Fin Antenna, LF Antenna | Minda INFAC Private Limited | Maruti Suzuki, Hyundai, KIA, Stellantis | 1 | Pune |
Minda INFAC Private Limited
Minda INFAC Private Limited is a joint venture between Minda Corporation and INFAC Elecs co. Ltd., Republic of Korea for manufacturing of antennas for automotive sector. Minda INFAC specialises in the production of antennas through a chain of operations starting from designing, conceptualizing, developing, manufacturing to installing and assembling In addition to this, Minda INFAC also provides testing services, distribution, promoting and marketing in both wholesale and retail segment. The Company manufactures a wide range of cutting-edge antennas, such as the Micro Pole Antenna, GPS Antenna, Combi Shark Fin Antenna, Glass Antenna, Switch Assembly and LF Antenna. Minda INFAC private limited produces antennas locally at the Companys set up state-of-the-art manufacturing facility in Pune.
Opportunities
Advanced Driver Assistance System (ADAS) solutions
The automotive industry in India is undergoing a significant shift towards advanced safety and driver assistance systems. This trend presents an opportunity for the Company to expand its offerings and cater to the unmet demand for Advanced driver-assistance systems (ADAS) solutions. The Companys collaboration with DAESUNG, a prominent automotive electronics firm, makes it well-positioned to take advantage of this opportunity and provide localised ADAS solutions for the Indian market.
Telematics Systems
With greater demand for connected mobility and smart transport solutions, there is an opportunity for the Company to expand its capabilities and become a leading provider of telematics systems. The Companys recent technical collaboration with LocoNav India is a step in this direction. Also, further expansion of its offerings in this segment could help the Company gain a competitive advantage in the market.
Electric Vehicle Components and Systems
With the shift in Indian market towards electric vehicles, there is an opportunity for the Company to develop specialised components and systems for this burgeoning sector. This could include components such as battery management systems,
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electric powertrain components and charging infrastructure components. As the market for electric vehicles grows in India, the Company could consolidate its position as a key player in this space.
Government Initiatives
The Indian government has provided enhanced impetus in this sector by rolling out numerous favourable initiatives such as Make in India, the Automotive Mission Plan 2026 and the National Electric Mobility Mission Plan (NEMMP) 2020. These programmes are expected to benefit the automotive industry. Additionally, the recent introduction of a battery swapping policy allows for depleted electric vehicle batteries to be replaced with fully charged ones at designated charging stations, thereby increasing the feasibility of electric vehicles for potential buyers. To establish the Electric Vehicle Supply Equipment (EVSE) infrastructure for electric vehicles, several public sector entities, ministries and the railways are collaborating to manufacture components and develop robust infrastructure.
Rising Demand
The automotive industry is witnessing a surge in demand owing to various factors, such as an increasing disposable income and a young, aspiring population. Moreover, the availability of credit and financing options has made owning a vehicle more accessible. The demand for commercial vehicles has also grown due to upbeat activity in the infrastructure sector.
In addition to this, the Company has secured orders from various segments, with electric vehicle orders comprising over 20% of the total orders received during FY2023.
Challenges
Dynamic Technology Landscape
The automotive industry is evolving rapidly, with new technologies and innovations emerging all the time. The Company will need to stay abreast of these developments and modify its offerings accordingly. This may require significant investment in R&D, as well as the ability to quickly bring new products and services to market.
Intense Competition
The automotive industry in India is highly competitive and it is expected that the Company may face stiff competition from established players in the market. To compete efficiently, the Company will need to differentiate itself by offering quality products and services at competitive prices.
Regulatory Challenges
Indias automotive industry is subject to a range of complex regulations and standards. The Company will need to ensure that its products and services meet all relevant regulations, which may require significant investment in compliance.
| S. No. Particulars | FY23 | FY22 | % of change | Reason of change |
| 1 Debtor Turnover (days) | 42 | 50 | -19% | - |
| 2 Inventory Turnover (days) | 74 | 71 | 4% | - |
| 3 Interest coverage ratio | 8.09 | 6.70 | 17% | - |
| 4 Current Ratio | 1.25 | 1.53 | -23% | - |
| 5 Debt Equity Ratio | 0.25 | 0.04 | 82% | Increase in ratio is due to new loans taken during the year for capex requirements. |
| 6 EBITDA Margin | 10.70% | 9.90% | 7% | - |
| 7 Net profit margin | 6.62% | 6.45% | 3% | - |
| 8 Return on net worth | 17.9% | 14.4% | 19% | - |
Human Resources
The Company acknowledges its human capital as the key to its success. It is committed to attracting and retaining the best talent in the industry and providing them with a supportive and empowering work environment. Throughout the course of their employment with the Company, it encourages its people to explore novel and exciting opportunities. The Company has also made sincere efforts to increase the representation of women in senior positions within the organisation, while simultaneously prioritising performance-based measures to drive the Companys success.
The Company has implemented a digitalization process for all lateral hiring to enhance efficiency and ensure transparency. Nurturing Talent is a fundamental core value of the Company, which emphasizes the provision of growth opportunities and support for both individual and team developments. The Company releases internal job postings for employees to discover growth opportunities within the organization. In the fourth quarter, a total of 80 jobs were internally posted, resulting in more than 20 successful selections.
The Company introduced the Young Spark campus program in order to attract young engineers, trainees and professionals to the automobile component industry. This year, the Company aims to on board over 100 young talents into the organization. To promote the culture of development and competency mapping for existing roles, the Company places a strong emphasis on the Learning Management module called LMS Gurukul. To achieve the organizational business plans, the Company has implemented the Associates Learning Development Plan and the Supervisor Skill Development Program at a group level. These plans span a period of 2-3 months and are designed to enhance employee relations, foster knowledge and skill development, nurture and build capabilities and promote learning within the plant.
When it comes to employee engagement, the Company begins the process of developing a long term strategy through a bottom-up approach, which eventually leads to the fulfilment of individual goals. This process helps create alignment throughout the entire organization. The progress towards these goals is monitored and reviewed during the annual SMC meet. The theme for this years meet was centred around DIL which implies Disrupt, Innovate & Lead. As part of its talent management approach, the Company combines various elements such as performance management, succession planning, employee engagement and rewards into a single calendar. The output of one element serves as the input for another, resulting in the development of future leaders and the careful evaluation of leadership skills. The success of this initiative is evident from the fact that a total of 141 employees were promoted with an equal number being job rotated.
The Company has also adopted Safety First as its motto as a crucial component of its health and safety policy for employees. The primary objective is to achieve Zero Injuries in the workplace. First Aid and Fire Fighting Training, as well as proactive and need-based health check-ups, are integral to the Companys governance. In the post-Covid pandemic era, the Company remains vigilant and monitors the progress of its Safety initiatives through robust Safety Committees across all locations. Additionally, the Company has implemented three medical policies at the Group Level, catering to employees, their parents and dependent family members.
16,000+
Total employees
Risk Management
The Company has a comprehensive framework for risk management in place aimed at safeguarding the welfare of its stakeholders by identifying, scrutinising and managing potential business risks. This involves a variety of approaches, including risk identification surveys, analysis of the business environment and soliciting feedback from both internal and external stakeholders. The fundamental objective of the Companys Risk Management framework is to ensure that potential risks are identified and addressed in a timely and efficient manner, while also retaining the ability to adjust to changing business demands.
Business outlook
The Company remains optimistic about the auto sectors outlook, primarily due to strong signs demand in the domestic market. The Company will prioritise automation over manual lifting to reduce its reliance on human labour while improving quality, productivity, efficiency and profitability. Additionally, the Companys primary goal is to discover ways to enhance the manufacturing capabilities both internally and with its suppliers. Moreover, the Company aims to expand their heritage portfolio, while simultaneously pursuing new business endeavours through consistent R&D.
Internal control systems
The internal control systems of the Company are adequate considering its business nature, size and complexity of operations. To adapt to the evolving needs, the Company has increased its emphasis on the Corporate Audit and Governance (CAG) function, which now has an expanded scope covering various areas, such as establishing corporate governance policy and an internal control framework, conducting internal, management and IT audits, drafting and implementing policies and procedures, ensuring compliance with environmental laws, as well as reviewing and reporting statutory compliances.
The Company has implemented a rigorous set of internal controls to guarantee the protection of all assets against unauthorised use or disposal, as well as ensure that transactions are authorised, promptly recorded and reported. The sufficiency of the internal control systems is regularly evaluated by the Company. Internal controls have been developed to ensure the transparency and adequacy of financial and other records along with reliable resources for producing financial reports and other data.
The Audit Committee of the Company assesses the sufficiency and efficacy of its internal control framework and oversees the execution of audit suggestions, particularly those aimed at enhancing the Companys risk management strategies and systems.
Disclaimer
The MDA section may contain forward-looking statements regarding future prospects. These statements involve various known and unknown risks and uncertainties, which may result in material differences between actual results and the forward-looking statements. In addition to changes in the macro-environment, the emergence of a global pandemic such as COVID, can introduce unforeseen, unprecedented, unascertainable and continuously evolving risks to the Company and its operating environment. The estimates and figures presented in the report are based on certain assumptions made by the Company, taking into account internal and external information that is currently available. However, the factors underlying these assumptions can change over time, leading to corresponding changes in the estimates on which they are based. It should be noted that forward-looking statements only reflect the Companys current intentions, beliefs, or expectations as of the date on which they were made. The Company is not obligated to revise or update any forward-looking statements in light of new information, future events, or other factors.
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