ICICI Direct's research report on Mahindra CIE Automotive
Mahindra CIE Automotive (MCIE) reported decent Q4CY20 results on the operational front. Consolidated revenues rose 13.6% YoY to Rs 1,958 crore (India up 14.6%, Europe up 9.4%). EBITDA margins for the quarter were at 12.6% (up 371 bps QoQ). India EBIT margins were up 250 bps QoQ to 9.9%, with Europe margins up 150 bps QoQ to 6.8%. Consolidated PAT was at Rs 112 crore vs. Rs 12.6 crore in Q3CY19 (base quarter hit by higher tax outgo, exceptional charge).
We value MCIE at Rs 220 (i.e., 8x CY22E EV/EBITDA; previous target Rs 170) and maintain BUY. We believe MCIE is available at reasonable relative valuations considering its track record of industry-beating growth, strong cash generation profile (10%+ CFO yield at CMP).
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