CIE Automotive - Profitability To Maintain As Growth Moderates: Motilal Oswal

Motilal Oswal Repor

We recently met with the management of CIE Automotive India Ltd., and following are the key takeaways from the discussion.

The domestic market is experiencing a weak demand phase in the tractor and passenger vehicle segments, while two-wheeler 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 CIE Automotive.

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, CIE Automotive 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 free cash flow, and tracking an improving return trajectory.

We reiterate Buy with a target price of Rs 650 (based on ~21 times Sep’26E consolidated earnings per share).

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.