Buy CIE Automotive India; target of Rs 440: Motilal Oswal
Moneycontrol • 9 days ago
Key Investment Pillars
- India business growth: CIE Automotive India's India business is expected to drive growth, with a pickup in demand across segments and new order wins.
- European operations: The company will focus on maintaining margins in Europe amid reduced demand, with a potential for market-share gains through industry consolidation.
- Capacity expansion: CIE Automotive India plans to nearly double its growth capex in CY26, with a focus on organic expansion and new capacity additions.
- Diversification: The company is diversifying its aluminum operations into high-pressure die-casting components for four-wheelers.
Thesis Validation Checklist
- India revenue growth: Watch for continued growth in India revenue, driven by demand across segments.
- European market share: Monitor CIE Automotive India's ability to gain market share in Europe through industry consolidation.
- Margin maintenance: Track the company's ability to maintain margins in Europe amid reduced demand.
- Capacity utilization: Keep an eye on the company's capacity utilization rates, particularly in the foundry division, which is expected to be fully booked once the new US customer program reaches its planned ramp-up.