CIE Automotive India Ltd. share price target

We maintain our BUY rating on the stock.

CIE Automotive’s (CAIL) Q4CY24 consolidated PAT of INR 1.8bn was lower than consensus estimate of INR 1.9bn, with ~4% miss in revenue and ~100bps miss in EBITDA margin.

CIEINDIA’s 4QCY24 EBITDA/PAT of INR2.99b/INR1.8b came in below our estimates of INR3.2b/INR1.9b, due to a weak demand macro in India and Europe.

We maintain our BUY rating on the stock.

The domestic market is experiencing a weak demand phase in the tractor and PV segments, while 2W continues to perform relatively well.

CIEINDIA is a large, diversified auto-components group with a presence across many processes, product lines, geographies, and customers. The company’s unique combination of specialization in high value-added products.

We maintain our BUY rating on the stock.

CIE Automotive (CAIL) Q2CY24 adj. consolidated PAT of INR 2.2bn was in-line with our estimate, with ~4% miss in revenue getting balanced by ~50bps beat in EBITDAM.

Based on this, we arrive at our SOTP-based TP of Rs 560/share (earlier Rs 565/share), implying an upside of 14% from the CMP.

While CIEINDIA's 1QCY24 operating performance was in line with our
estimates, higher other income drove PAT beat. A delay in the ramp-up of
orders from the customers’ end hurt revenue growth.

Thriving in Turbulence

The management indicated that the company will continue to outperform overall industry growth by over 5% in India and European business to gradually grow in line with industry growth. It maintained long-term EBITDA margin guidance at ~17-18%.

Our BUY recommendation is based on growth potential in Indian operations led by increased capacities, further headroom for operational efficiencies and a healthy balance sheet. We expect weakness in European business in H2CY23 but a gradual recovery post that in CY24.

CIE Automotive India’s (CAIL) Q3CY23 consolidated PAT of INR 1.9bn was down 13% QoQ, and lower than our estimate of INR 2.2bn. This was driven by ~80bps QoQ decrease in EBITDAM, at 15.2%, higher interest expense and 200bps higher tax rate. EU revenue declined 15% QoQ to INR 7.3bn due to a slowdown in Metalcastello, and is expected to improve.

A temporary blip