Uno Minda share price flies to a new high as the winning streak continues for the second day

Uno Minda's share price continued its upward momentum for the second straight session, climbing over 9% to reach a 52-week high after the company announced the execution of a technical license agreement with Suzhou Inovance Automotive Company. The share price opened at ₹995.30 per share on the BSE today, reaching an intraday high of ₹1,064.85 and an intraday low of ₹981.30.

On Thursday, Uno Minda's share price surged by 19% during the intraday session, reaching a new all-time high of ₹1,025 and surpassing the ₹1,000 mark for the first time. Additionally, Thursday's intraday high represents the stock's most significant gain in the past eight years. Over the course of two sessions, Uno Minda's share price has increased by approximately 24%.

The rally was triggered by the company's announcement on Wednesday that it had entered into a Technical License Agreement (TLA) with Suzhou Inovance Automotive Co., Ltd. in China. This agreement permits Uno Minda to manufacture and distribute specific high-voltage electric vehicle products for both passenger and commercial vehicles in India.

The agreement allows the firm to produce combination charging units (CCU), e-axles, inverters, and motors. In return for the technology, the corporation will pay a royalty on sales. The company believes that this collaboration will significantly expand its e-4W product line, enhancing its ability to serve the growing Indian EV market.

Meanwhile, its EV product line for 2W and 3W includes Battery Management Systems (BMS), on-board chargers, off-board chargers, RCD cables, body control modules, smart plugs, telematics, and Acoustic Vehicle Alert Systems (AVAS).

The firm is stepping up its attention on the EV industry, as indicated by a growth in its EV order book to ₹38 billion in Q4 FY24, up from ₹33 billion the previous quarter.

Foreign brokerage Nomura bumped up its target price on Uno Minda as the company inked a deal with China's lnovance Automotive to boost the electric four-wheeler product portfolio. Nomura maintained its buy call on Uno Minda, with a target price of ₹1,063 per share. This implies an upside of around 24%.

Nomura stated that the new partnership is significant as it is expected to increase the content per vehicle to ₹1.5-2 lakh, up from the current ₹50,000-60,000. Consequently, Uno Minda's total addressable market is projected to grow to ₹25,000 crore by FY30. Nomura also noted that the current valuation of 38x P/E is attractive, considering Uno Minda's growth prospects.

This development is particularly important as the management indicates it will 'significantly' expand its e-4W product portfolio, allowing the company to effectively serve the rapidly growing Indian EV market. "Uno Minda aims to further strengthen the partnership by transitioning it into a joint venture, subject to necessary approvals," it said in a regulatory filing.

In the fiscal fourth quarter of the financial year 2024, the automotive systems and solutions provider saw a substantial 59% year-on-year (YoY) increase in net profit, reaching ₹289.1 crore, up from ₹182.6 crore in the same quarter of the previous year. Over the past year, Uno Minda shares have surged more than 75% in trading, compared to a 21% gain in the frontline Nifty 50 index.

UNO Minda Ltd (UNO Minda), formerly Minda Industries Ltd, carries out in the manufacturing of automotive parts and accessories. The company's product portfolio includes two-wheeler switches and handlebar systems, electronic components, automotive horns, automotive lamps and blow-molded products.

In addition, it also provides CNG and LPG kits, sensors, actuators, controllers, fuel caps, alloy wheels, batteries, filters and canisters. Minda Industries offers products and services for four-wheelers, two/three-wheelers and off-road vehicles. The company provides aftermarket services.

Its key clients include Maruti, Renault Nissan, M&M, Royal Enfield, Yamaha, Tata, Suzuki, Swaraj Mazda and New Holland, Bajaj, Triumph, KTM and ISUZU among others. It operates in India and Spain. UNO Minda is headquartered in Gurgaon, Haryana, India.