Motilal Oswal's research report on CIE Automotive India
We recently met with the management of CIE Automotive (CIEINDIA), and following are the KTAs from the discussion. The domestic market is experiencing a weak demand phase in the tractor and PV segments, while 2W continues to perform relatively well. The global auto market, particularly in Europe, remains sluggish. The EV transition in India continues to evolve as a growth opportunity, given the healthy new order wins. Additionally, the risk of EV transition in Europe remains mitigated, given that: 1) most European OEMs are now reconsidering their EV transition deadlines and 2) hybrids are likely to gain traction in Europe, which augurs well for CIEINDIA. However, the management remains committed to focusing on: 1) outperforming the core domestic industry growth in the long run; 2) further improving operational efficiencies in India; and 3) revising costs in Europe to the new normal. Given its focus on operational efficiencies, CIEINDIA has evolved into a highly resilient company. Some of the financial attributes unique to the global ancillary player include: being net debt free, having strict capex/inorganic expansion guidelines, generating positive FCF, and tracking an improving return trajectory.
Outlook
We reiterate BUY with a TP of INR650 (based on ~21x Sep’26E consol. EPS).
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