Uno Minda shares today fell more than 2%, slipping into the red zone. However, according to the target price set by global brokerage firm CLSA, this dip should be seen as a buying opportunity. CLSA analysts believe the stock has the potential to reach new highs. Currently, it is trading on the BSE at ₹1108.10, down slightly by 0.04%, after reaching a high of ₹1130.95 with a 2.03% gain earlier. Over the past month, the shares have gained nearly 10%. CLSA has initiated coverage with an outperform rating and a target price of ₹1304.
Why Is Brokerage So Bullish on Uno Minda?
Brokerage firm CLSA believes that with improvements in RoCE (Return on Capital Employed), Uno Minda’s growth is expected to be the fastest in the industry. Due to cyclical factors, the performance of the Indian passenger vehicle, two-wheeler, and commercial vehicle segments is expected to be stronger during FY 2026-28 compared to FY 2024-26, growing at an annual rate of 8-10%. CLSA says that as one of the fastest-growing auto ancillary companies, Uno Minda has demonstrated stability amid industry fluctuations thanks to its diversified product range and product base. These strengths position it well to benefit significantly from the auto sector’s recovery.
The company’s operating profit margin is expected to improve, and earnings could nearly double between FY25 and FY28. Its free cash flow is projected to be robust during FY 2026-28, with expectations to turn net cash positive by FY 2028. This financial strength will enable the company to continue strategic acquisitions or invest in new projects. CLSA estimates that with an asset turnover of 2.2x and a debt-to-equity ratio maintained at 0.5x, the company could achieve an additional 40% revenue growth and improved operating margins through inorganic expansion by FY 2028. On the risk side, supply chain issues in the two-wheeler and passenger vehicle segments could cause some slowdown.
How Have the Shares Performed Over the Past Year?
Uno Minda shares hit a record high of ₹1252.85 on September 2, 2024. However, the rally stalled, and over the next seven months, the shares dropped 38.69%, hitting a one-year low of ₹768.10 on April 7, 2025. Since then, the shares have stabilized, and now brokerage firms believe they are poised to reach new highs. CLSA has set a target price of ₹1304.
Disclaimer: This article is just for information. It should not be treated as investment advice in any way. Investing in the stock market is based on risk. Be sure to consult your financial advisor before investing in the stock market.
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