Buy CIE Automotive India; target of Rs 578: Geojit Financial Services

About this update from Cie Automotive India Ltd

Geojit Financial Services research report on CIE Automotive IndiaCIE Automotive India Ltd. (CIE) is the part of a Spain-based, top global forging player with a strong presence in both Europe & India. Currently, 60% of the revenue comes from India, while the rest is from Europe. Despite a softened demand environment, the consolidated revenue declined by a marginal 2% YoY YTD. We believe the domestic demand will pick up in H2, owing to improvement in infra spending. Q3CY24 revenue fell by -6.4% due to subdued growth from European business. Whereas, India business grew by 2% YoY. Meanwhile, EBITDA margin improved by 33bps YoY owing to lower input costs and sustained cost reduction efforts. We expect CIE to maintain a margin in the range of 15-16% in CY25 & CY26. Though the current order will suffice for the required growth in the near term. Global macro turbulence could delay capacity expansion from major OEMs in the EV space and gradually recover in line with industry growth. Increased business with existing customers owing to supplier consolidation, localization and improved content per vehicle is adding value for the company.OutlookWe rollover our valuation and estimates to CY26 based on the positive long-term outlook in India (2W business) and the Mexican operation. Considering this, we recommend a BUY rating (20x CY26E EPS) with a target price of Rs.578 at CMP.For all recommendations report, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.CIE Automotive India - 27112024 - geo

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