Motilal Oswal's research report on CIE Automotive
1QCY24 consol. revenue remained flat YoY at ~INR24.3b (vs. est. INR23.6b), due to lower-than-est. growth in India (6% YoY vs. est. 7%), while EU declined 8% YoY (vs. est. decline of 18%). EBITDA stood at INR3.6b (vs. est. INR3.5b), down 5% YoY. EBITDA margins stood at 14.9% (in line). There was a one-off item in other income related to INR220m in subsidy received by its subsidiary, Aurangabad Electricals. Thanks to higher other income, adj. PAT grew 4.5% YoY to INR2.3b (vs. est. INR1.9b).
Outlook
The India business is expected to be the key growth driver for the company in CY24 and the bulk of its capex is currently in the India business to expand for new customer orders. While the near-term outlook for Europe is weak, we expect it to pick up in CY25 on the back of its new order wins. The company will continue to strive to improve efficiencies further in the coming years as well. The stock trades at 20x/17x CY24E/CY25E consolidated EPS. Reiterate BUY with a TP of INR 565 (based on 18x Mar’26E consol. EPS).
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