Mahindra CIE Automotive - Growing Profitably, Efficiently: ICICI Securities

Mahindra CIE has been diversifying business in terms of processes, user segments and customers on a continuous basis.

<div class="paragraphs"><p>Auto components. (Photo: Nina Mercado/ Unsplash)</p></div>
Auto components. (Photo: Nina Mercado/ Unsplash)

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ICICI Securities Report

We recently interacted with the management of Mahindra CIE Automotive Ltd. and following are the key takeaways from the meeting:

  1. Mahindra CIE is prepared to deliver 800 basis points higher than original equipment manufacturer industry growth in the longer run through mix of portfolio diversification and wallet share gains;

  2. set to cater electric vehicles in India and Europe through steel and aluminum casting/forging other than stamping and gears;

  3. confident of ~17-18% and ~16-17% India and Europe Ebitdam in CY23-24, driven by productivity improvement in India and stabilising power cost in Europe;

  4. Europe EV risk to get mitigated by expansion in aluminum forging capability in coming years and thus, Mahindra CIE is looking forward to deliver ~5% revenue compound annual growth rate in Europe;

  5. to keep capex/sales ratio ~6% in coming years and use free cash flow proceeds to pare off debt and fund inorganic growth needs, especially in areas like plastic parts and EV parts;

  6. Europe truck forging sale deal is likely to get executed within the next couple of quarters and may help Mahindra CIE reduce debt further.

Click on the attachment to read the full report:

ICICI Securities Mahindra CIE Company Update.pdf
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