- Target
- ₹1,407
- At report
- ₹993+41% printed
- Vs our close
- +12.7%
HDFC Securities initiates coverage on Indo-MIM, the world's largest metal injection molding (MIM) manufacturer with ~7% global market share, with a BUY rating and TP of INR 1,407 (54x Sep-28E EPS), implying 41% upside. The thesis rests on IML's diversification beyond core MIM into investment casting, aerospace machining and automation, deep entrenchment with US OEMs amid China+1 supply-chain shifts, and multi-year optionality from humanoids, defense, aerospace and data-center end markets.
- World's largest MIM manufacturer with ~7% global market share (~15% ex-China) by revenue, entrenched with top US MNCs across automotive, aerospace, consumer, medical and defense; 91.6% of FY26 revenue from repeat customers
- Revenue expected to grow at 18-20% CAGR (Revenue FY26-30E CAGR ~19% to INR 84bn), led by aerospace machining and investment/vacuum casting growing 30-50% CAGR over the next two years post capacity expansion; ~400 aerospace components under qualification in addition to ~1,150 approved
- Core MIM business expected to grow organically 8-10%, ahead of global MIM industry growth of 6-7%, on new SKUs, new geographies and M&A-led optionality
- Onsite US/UK/Mexico manufacturing (15 plants globally) provides tariff insulation and positions IML as a key beneficiary of US supply-chain diversification/China+1 realignment, including US DoD capex on national security and drone programs
- Large multi-year optionality from next-gen innovation verticals — MIM revenue TAM for US humanoid robots alone estimated to grow from USD 27mn in CY27 to USD 1.1bn in CY30 and USD 12.5bn by CY35 (at ~3% of humanoid robot sales)
- Global subsidiaries (SAT, TRIAX, CMG, PDV) at the cusp of a turnaround, expected to aid consolidated profitability as order books and volumes pick up
- High customer concentration: top 10 customers contributed 38%+ of revenue since FY23
- No definitive long-term sales agreements; order inflows largely based on purchase orders, limiting revenue visibility
- Reliance on imported raw materials (metal powders, polymers; ~60-61% of raw material purchases sourced from outside India in FY26) and supplier concentration (top 10 suppliers ~43% of raw material cost in FY26)
- Manufacturing concentration in southern India creates regional operational risk
- Currency exchange rate fluctuations given export-focused business model
- New iron powder manufacturing facility at Gowribidanur, Chikkaballapur expected by end of FY27
- Ramp-up of ~400 aerospace components currently under qualification
- PLI-style capacity build-out and M&A-led expansion into new geographies
- Turnaround of global subsidiaries (TRIAX, PDV) as order books recover
| Broker estimates | Unit | FY24 | FY25 | FY26 | FY27E | FY28E | FY29E | FY30E |
|---|---|---|---|---|---|---|---|---|
| Revenue | ₹ mn | 28,704 | 33,296 | 41,930 | 50,046 | 59,295 | 72,357 | 84,296 |
| EBITDA | ₹ mn | 7,435 | 9,326 | 10,709 | 15,611 | 18,156 | 23,323 | 28,331 |
| EBITDA Margin | % | 25.9 | 28 | 25.5 | 31.2 | 30.6 | 32.2 | 33.6 |
| APAT | ₹ mn | 3,411 | 4,997 | 5,921 | 9,441 | 11,165 | 14,626 | 17,973 |
| Diluted EPS | ₹ | 6.9 | 10.1 | 12 | 19.1 | 22.6 | 29.6 | 36.3 |
| P/E | x | 141 | 96.2 | 81.2 | 52 | 44 | 33.6 | 27.3 |
| EV/EBITDA | x | 65.8 | 52.7 | 45.5 | 31.5 | 27 | 20.9 | 17 |
| RoE | % | 16.8 | 23.5 | 23.6 | 27.6 | 25.1 | 26.9 | 26.9 |
| RoCE | % | 13.5 | 17.4 | 19.5 | 22.9 | 21.5 | 23.1 | 23.2 |
| Net Debt/EBITDA | x | 1.1 | 1.1 | 0.6 | 0.1 | -0.1 | -0.1 | -0.3 |
Valuation: SOTP / segmental P/E-based valuation. HDFC Securities applies a weighted-average P/E across IML's five segments (APG 40x, CPG 60x, DPG 50x, MPG 50x, Precision machining/Aerospace/AE 80x), blending to a 54x Sep-28E EPS target multiple — a 10% discount to MNC capital goods peers — to derive the TP of INR 1,407/share, with potential re-rating toward 60x over time.
Extraction note: Initiating coverage report; no prior estimates exist so estimateChanges is null. IML has no direct listed Indian peer per the broker, hence valuation is SOTP/segmental P/E rather than a single peer multiple. Figures are consolidated (Rs mn) as printed; EPS in the Key Ratios table…