CIE Automotive India Ltd. share price target

Business de-risking in progress to combat soft demand Demand worries continued to weigh on MCI prospects both in India and in Europe. Domestically, while the PV and UV segment have witnessed lower decline than other segments, the CV space continues to remain under stress in particular. M&M;, Tata Motors, Maruti Suzuki, Hero MotoCorp and Bajaj Auto combined form >50% of MCI's India business. The company's India business ex-AEL de-grew 12% YoY in CY19 against blended ~6% fall in volumes at these key clients, highlighting slowing of previous trend of MCI...

27 February 2020 MACAs 4QCY19 operating performance was weak across operating parameters owing to a sharp fall in EU business revenue. We downgrade our CY20/21 EPS estimate by ~8%/3% to factor in the weakness in the EU business. Maintain with a target price of ~INR191 (~12x Dec21 EPS) due to cheap valuations. India business grew at ~6% driven by consolidation of AEL. substantially higher tax provisioning (both in India and EU) resulted in ~87% For CY19, revenue/EBITDA/adj. revenue grew ~6% driven by consolidation of AEL (organic decline of ~12%). India business EBITDA margin contracted ~100bp YoY to ~11.7%, translating into a PBT decline of ~22% to ~INR578. revenue declined ~27% YoY in INR terms and ~23% in EUR terms, impacted by de-growth in the commercial and off-road vehicle markets. EU EBITDA margin shrank ~150bp YoY to 12.1%, but was up ~100bp sequentially driven by restructuring initiatives.

Steady Performance Maintain BUYDuring Q3CY19, MHCIEs consolidated sales declined by 5.7% YoY to Rs18.6bn (below our estimates of Rs 19.1bn).

The stock price of Mahindra CIE MHCIE MNC auto ancillary Company

MCIE's consolidated revenue grew by marginal 5% (below expectation) owing to consolidation of AEL to India business, growing at 15%YoY, whereas European subsidiary de-grew by 2.7%YoY. Despite new orders in Gears & Forging segments, production cut by major European car manufactures dented order inflow. Lower sales in domestic market continues to put pressure on the growth. EBITDA margin contracted by 180bps due to negative exchange rate impact of 3% in sales and higher employee cost....

Mahindra CIE Automotive (MCI) reported a subdued Q2CY19 performance. Consolidated sales were at | 2,142 crore, dragged by ~12% decline in Indian sales (like-to-like) and flattish Europe business performance. MCI consolidated Aurangabad Electricals (AEL) while reporting Q2CY19 numbers. Consolidated EBITDA was at | 269.4 crore, with attendant EBITDA margins at 12.2%, down 80 bps QoQ. Standalone revenues for Q2CY19 came off spectacularly, dropping 16.8% YoY to | 541 crore with margins at...

During Q1CY19, MCIE's consolidated revenue and PBT grew by 10% & 12%YoY respectively, in line with our estimates. The growth was driven by 15%YoY & 2%YoY from European and India business. Despite weak European car sales, the new orders in Gears & Forging segments supported the revenue. However weak domestic demand lowered the India share business. EBITDA margin improved by 50bps due to exchange benefit and superior product mix from Mexico Plant....

During Q1CY19 MHCIE reported mixed bag numbers. Going forward Management expects its Indian operations to remain steady during H1CY19 and international operations to be robust. During H2CY19 exact reverse is likely to happen with robust domestic operations and steady international operations.

Historically MCI has out-performed volume growth at its key OEM clients in India and Europe, tracking increase in its content per vehicle. This continued in Q1CY19 as MCI India posted ~2% QoQ revenue increase despite ~2% blended drop in volumes at domestic OEMs like M&M;, Maruti, Tata Motors and Hero Motocorp (>50% of business). India operations would also have been aided by fresh launches such as New Wagon-R, Marazzo, Alturas G4, Harrier and Destini 125. In parallel, MCI Europe reported top line growth of 15% (including 1% exchange gain) vs. PV segment de-growing by 5.2% in...

Mahindra CIE 7 May 2019 1QCY19 consol. net sales grew ~9% YoY to ~INR21.7b. EBITDA margins were stable at 13% (flat QoQ/YoY) and EBITDA grew 9% YoY to ~INR2.8b. PAT at ~INR1.53b, a growth of ~16% YoY. revenue grew ~3% YoY (+4% QoQ) to INR8.4b, despite ~9% YoY production decline for key customers. PBIT margin grew 100bp YoY to 11.6% due to higher other income (adj. for which there is 40bp YoY decline). revenue grew ~15% YoY to INR13.3b (constant currency growth of 14%), driven by strong growth at Metalcastello and Lithuania business.