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Geojit Research Report
CIE Automotive India Ltd. is the part of Spain -based, top global forging player with a strong presence in both Europe and India. Currently, 60%of the revenue comes from India, while the rest is from Europe.
We believe the current growth story in the domestic market and the focus on building the electric vehicle product portfolio and operation performance in the European business are likely to push the margin forward.
Despite lower sales due to higher pass-through to customers for Q2, CIE's consolidated margin expanded by 217 basis points on the back of benign metal prices and cost control initiatives by discontinuing German operations.
Though the current order will suffice for the required growth in the near term. However, Global macro turbulence could delay capacity expansion from major original equipment manufacturer.
Increased business with existing customers owing to supplier consolidation, localisation and shifting production to India as the primary hub for export is adding value for CIE Automotive.
We expect a re-rating in valuation similar to listed MNCs in the automotive sector and recommend 'Buy' rating at current market price (21 times CY24E earnings per share).
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