Uno Minda: EV Components Growing Fast,Margins Under Pressure

Uno Minda (NSE : UNOMINDA) is an automotive component maker supplying switches, lighting, alloy wheels, seating, sensors, controllers, advanced driver assistance systems and aftermarket products. Its EV portfolio covers battery management systems, chargers, DC-DC converters, motor controllers, traction motors and body-control modules. What happened: In Q1FY27, revenue grew 23.8% year on year to Rs 5,557 crore. Operating profit rose only 5.3% to Rs 572 crore; operating margin fell to 10.3% from 12.1%. Net profit grew 2.1% to Rs 316 crore; net profit margin dropped to 5.7% from 6.9%. Commodity and gas-cost inflation, raw-material pass-through lags and higher minimum wages drove the margin compression. Green Mobility revenue was Rs 542 crore, up 78%, contributing about 10% of total revenue. Why it matters: The EV component business is scaling fast. Uno Minda EV Systems contributed Rs 186 crore in Q1FY27; the controller division’s EV segment added Rs 37 crore. The Khed City facility in Pune will begin producing advanced e-axles in H2FY27. Uno Minda also acquired full control of its two-wheeler and three-wheeler EV technology ventures. Export seating orders from European and North American customers have a peak supply potential of Rs 390 crore annually, beginning in FY28. What I am watching: Operating margin at 10.3% is well below the year-ago 12.1%, and net profit grew only 2.1% on 23.8% revenue growth. The margin recovery timeline is uncertain while input costs remain elevated. My stance: The EV portfolio is real and growing fast. But margins are compressing even as revenue scales. Until operating leverage shows, the gap between revenue and profit growth is the key concern. I do not hold a position in Uno Minda at the time of writing. This is not investment advice.