Any current/future new fundraising through debt or equity?

No specific current or advanced stage fundraising through M&A or equity is mentioned. The company is actively looking for M&A opportunities in India, particularly to add customers and new business segments. They will only pursue M&A if it is deemed appropriate, not just because of available cash. No mention of new debt fundraising or equity issuance in the provided content. Interest costs in Europe have increased due to higher interest rates, but no plans mentioned for new debt. The company is managing cash and debt considering cost of borrowing and cash pooling arbitrage.

Any current/future capex/capital investment/strategic investment?

India business has been making growth capex of about Rs. 200 to 250 Crores per year for the last 2-3 years, with similar plans for the near future. Investments are made against committed orders, though some ramp-ups have been delayed but expected to happen. New and expansion capex examples include: - New plant at CIE Hosur. - Expansion in the aluminum EV four-wheeler space. - Investments in Mahindra’s EV new models. - New tractor models from Mahindra. Strategic investments/M&A approach: - Actively looking for M&A opportunities in India, especially to add customers and new business se

Future growth expectations in sales/revenue/volumes?

India aims to grow sales approximately 5% or more above the weighted average market growth in the medium term (2-3 years). New project ramp-ups delayed but expected to drive better growth results once they start, especially in aluminum EVs, four-wheelers, and tractors. The company targets growth across almost every vertical in India with continued investments and expansion. Europe expects flat or slight declines in car production, but plans to outperform the market through new orders, especially in electric vehicles. Electric vehicle-related orders comprise a significant portion of new project

Future growth expectations in earnings/operating earnings/profits/EPS?

The company expects to achieve the highest PAT in its history in calendar year 2023, with recurring PAT growth of 20% year-to-date (YTD), excluding onetime profits. Margin improvement is viewed as a "never ending story" with identified gaps and ongoing projects aimed at further efficiency gains, particularly in India. Growth capex of about Rs. 500-750 Crores has been committed with expected ramp-ups in new projects, especially in electric vehicle (EV) segments and new customer orders, although some ramp-ups have been delayed. The company aims to grow at least 5-6% higher than the weighte

Current/ Expected Orderbook/ Pending Orders?

In India, CIE Automotive has been investing significantly with growth capex averaging ₹200-250 Crores annually, supported by committed orders. The company has new plants and expansions, such as the aluminum EV four-wheeler plant at Hosur. Several new model ramp-ups, including Mahindra’s EVs and new tractor models, are underway but have experienced some delays. Approximately 50 customers in India have sales exceeding ₹10 million per annum, with around half added in the last 2-3 years, indicating ongoing customer addition as a key growth strategy. In Europe, 74% of new orders this year are for e

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CIE Automotive India LtdQ3 FY23Auto Components

CIE Automotive India Ltd Q3 FY23 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹471P/E: 20.8Market Cap: ₹18.0K CrSector: Auto Components

Management growth scorecard

Revenue

Category 4

Margin

Category 3

Fundraise

N/A

Order

Yes

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 4

→India aims to grow sales approximately 5% or more above the weighted average market growth in the medium term (2-3 years).
→New project ramp-ups delayed but expected to drive better growth results once they start, especially in aluminum EVs, four-wheelers, and tractors.
→The company targets growth across almost every vertical in India with continued investments and expansion.
→Europe expects flat or slight declines in car production, but plans to outperform the market through new orders, especially in electric vehicles.
→Electric vehicle-related orders comprise a significant portion of new projects (74% in Europe, 10% in India) with ramp-ups expected over the next 1-2 years.
→Two-wheeler exports have dipped but domestic demand is picking up; festive seasons are expected to boost sales.
→Metalcastello in the US facing cyclical slowdown with a 15-20% drop expected but new EV orders are anticipated to compensate in the near future.

Margin guidance

Category 3

→The company expects to achieve the highest PAT in its history in calendar year 2023, with recurring PAT growth of 20% year-to-date (YTD), excluding onetime profits.
→Margin improvement is viewed as a "never ending story" with identified gaps and ongoing projects aimed at further efficiency gains, particularly in India.
→Growth capex of about Rs. 500-750 Crores has been committed with expected ramp-ups in new projects, especially in electric vehicle (EV) segments and new customer orders, although some ramp-ups have been delayed.
→The company aims to grow at least 5-6% higher than the weighted average market growth in India over the medium term (2-3 years).
→European operations expect recovery and improved results in 2024, particularly from EV orders and stabilization of power costs, supporting earnings growth.
→Ongoing efficiency improvements and new project ramp-ups are expected to contribute to future margin and profit growth.

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Fundraise plans

→No specific current or advanced stage fundraising through M&A or equity is mentioned.
→The company is actively looking for M&A opportunities in India, particularly to add customers and new business segments.
→They will only pursue M&A if it is deemed appropriate, not just because of available cash.
→No mention of new debt fundraising or equity issuance in the provided content.
→Interest costs in Europe have increased due to higher interest rates, but no plans mentioned for new debt.
→The company is managing cash and debt considering cost of borrowing and cash pooling arbitrage.

Order book

Yes

→In India, CIE Automotive has been investing significantly with growth capex averaging ₹200-250 Crores annually, supported by committed orders.
→The company has new plants and expansions, such as the aluminum EV four-wheeler plant at Hosur.
→Several new model ramp-ups, including Mahindra’s EVs and new tractor models, are underway but have experienced some delays.
→Approximately 50 customers in India have sales exceeding ₹10 million per annum, with around half added in the last 2-3 years, indicating ongoing customer addition as a key growth strategy.
→In Europe, 74% of new orders this year are for electric vehicles, reflecting alignment with market trends.
→Metalcastello expects order recoveries for US light trucks and EV programs, with around $28-30 million in orders in the passenger vehicle vertical.
→Delays in customer new EV orders ramp-up are noted but expected to commence and provide growth from 2024 onwards.

Capex plans

Yes

→India business has been making growth capex of about Rs. 200 to 250 Crores per year for the last 2-3 years, with similar plans for the near future.
→Investments are made against committed orders, though some ramp-ups have been delayed but expected to happen.
→New and expansion capex examples include:
→ - New plant at CIE Hosur.
→ - Expansion in the aluminum EV four-wheeler space.
→ - Investments in Mahindra’s EV new models.
→ - New tractor models from Mahindra.
→Strategic investments/M&A approach:
→ - Actively looking for M&A opportunities in India, especially to add customers and new business segments like aluminum and four-wheelers.
→ - No advanced M&A deals in the pipeline currently.
→ - M&A will be pursued only if appropriate and value-accretive, not just because of available cash.
→Cash balance expected to be around Rs. 500 Crores by year-end, with no immediate plans disclosed for debt repayment or other strategic capital deployment.

How does CIE Automotive India Ltd rank vs peers in Auto Components?

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1CIE Automotive India Ltd

Rev 4Mar 3

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