Mahindra CIE is a multi-technology automotive components supplier. It is a subsidiary of the CIE Automotive group of Spain; an industrial group specialised in supplying components and subassemblies for the automotive market, which has presence across the globe.

Quarter Performance:

The OPM during the second quarter ended June 2018 rose 300 bps to 12.5%due to increased raw materialexpenses. Raw material cost (as a % to sales, net of stock) rose 380 at 55.8% during Q1FY19. Other expenses (% of sales net of stock) fell 530 bps to 20.9%. Employee expenses fell 140bps to 10.9%.

Thus the operating profit rose 91% to Rs 81.54crore. Other income stood at Rs 5.19 crore, higher by 22%. PBIDT thus rose 85% to Rs 86.73 crore. After 1% rise in depreciation cost at Rs 18.41 crore and 57% drop in interest expense to Rs 79 lakh, PBT rose 151% at Rs 67.53 crore. After 156% risein tax provision (66 bpsrise in tax rate) at Rs 23.67 crore, net profit stood at Rs 43.86crore against profit of Rs 17.65crore in previous corresponding quarter, a rise of 148%.

Half Year Performance:

For thehalf year ended June 2018, the company's topline grew 38% to Rs 1261.84 crore.The OPM during 6MFY19 rose 290 bps to 12.3%due to decreased employee and other expenses. Raw material cost (as a % to sales, net of stock) rose 230 at 55.5% during 6MFY19. Other expenses (% of sales net of stock)fell 370bps to 21.4%. Employee expenses fell 140 bps to 10.8%.

Thus the operating profit rose 81% to Rs 155.7crore. Other income stood at Rs 10.34 crore, higher by 44%. PBIDT thus rose 79% to Rs 166crore. After 5% rise in depreciation cost at Rs 37.26 crore and 65% drop in interest expense to Rs 1.55 crore, PBT rose 139% at Rs 127.2 crore. After 136% rise in tax provision (43 bps drop in tax rate) at Rs 44.77 crore, net profit stood at Rs 82.43 crore against profit of Rs 34.29 crore in previous corresponding period, a rise of 140%.

The Company has investment of Rs 69,742.51 Lakhs in Mahindra Forgings Europe AG (MFE AG), Germany. After the significant decline in demand due to economic downturn in Europe andsome onetime costs due to one plant ctosure, MFE AG results got impacted in 2015 and 2016. Actions initiated by the management team have shown significant improvement in resu[ts for2017 and 2018. In view of this and the expected improvements, the company is of the view that, there is no diminution in the Company's investments in MFE AG.

Shares of Mahindra CIE Automotive are currently trading marginally higher round Rs 259 at BSE, the following day after earnings were announced.