Orderbook execution to support balanced growth…
About the stock: CIE Automotive India (CIE), part of the Spain-based CIE Automotive Group, is a multi-technology, multi-product automotive component.
• CY25 consolidated revenue mix –India 65%, Europe 35%. Forging is over 51% of consolidated sales (85% in Europe and 35% in India).
Q1CY26 Results: Consolidated revenue for Q1CY26 came in at ₹2,612 crores, up 15% YoY. EBITDA for the quarter stood at ₹402 crores (up 20% YoY) with corresponding EBITDA margins at 15.4% (up 90 bps QoQ). CIE India sales were up 15% YoY at ₹ 1,619 crore and EBITDA margins at 17.6% (down 100 bps YoY wherein Q1CY25 included a one-time positive impact) due to material cost increase amid geopolitical situation, while European operations witnessed a revenue of ₹922 crore (up 17% YoY, forex impact 17%, organic flat numbers) with EBITDA margins at 15.7% (up 180 bps due to recovery after restructuring).
Investment Rationale:
• Strong India Growth Engine with Expanding Capacity: CIE India, is a leading automotive component player, operating across India and Europe. In India it caters to the PV+LCV segment (53% of sales), 2Ws (23%), CV (11%) & off highway (tractor) segments (13%). CIE India’s domestic business did well amid healthy end-market growth across PVs, 2Ws & tractors. The recent GST optimisation is a major structural positive, reducing vehicle prices and potentially lifting 3-year CAGRs for PVs and 2Ws. CIE Automotive India appears well positioned to compound earnings through its domestic business, where it combines diversified customer exposure with a strong new order pipeline (~₹350 crores of new orders in Q1CY26). With ₹400-500 crores annual India capex planned and most spending directed toward growth projects, management is clearly preparing for sustained growth. Over the medium term, the company also sees a major opportunity for European OEMs to source more components from India due to cost pressures and supply chain diversification.
• Europe Recovery + Export Optionality + Balance Sheet Strength: The European business has quietly transitioned from a concern to a value creator, with restructuring driving margins back to healthy levels even in a weak market. This creates upside if volumes stabilize or industry consolidation benefits stronger suppliers like CIE. Capacity transfers from Europe to India enhance cost competitiveness. Additionally, multiple export-linked new orders are set to commence from Q2 onward, with management expecting export growth to recover meaningfully in the second half of CY26. The combination of a strong India growth engine, disciplined European margin protection, and robust cash reserves positions the company for steady compounding with limited B/S risk.
Rating and Target Price
• We maintain BUY rating on CIE Automotive tracking healthy growth opportunities at its Indian operations and focus on margins & efficiencies at its European business. Our target for CIE is pegged at ₹ 600 i.e. 21x PE on CY27 EPS. Healthy CFO/FCF yield provide good margin of safety.
