CIE Automotive India hosted a conference call on Oct 18, 2023. In the conference call, company was represented by Mr. Ander Arenaza Alvarez- CEO, Mr. K. Jayaprakash- CFO and Mr. Vikas Sinha- Sr. VP strategy.

Key takeaways of the call

In India, tractors sales during Q3 CY23 decreased by 10.1%, two wheelers sales decreased 1.5%, MHCV sales increased 20.5% and <6T vehicles (include Passenger Vehicles, Utility Vehicles, Vans and Light Commercial Vehicles) went up by 4.8% compared to Q3 CY22.

In India, tractors sales during 9M CY23 increased by 0.9%, two wheelers sales decreased 1%, MHCV sales increased 10.1% and <6T vehicles went up by 6.7% compared to 9M CY22.

Management indicated that, all businesses in India are performing well with positive expectations. Company expects India verticals to take off in 2024 supported by new project ramp up.

Festive season is expected to give boost to two wheelers segment in India. In addition, company expects tractors to remain stable going forward due to erratic monsoon.

In Europe, <6T vehicles sales during Q3 CY23 increased by 5.3% compared to Q3 CY22. In 9M CY23, <6T vehicles sales increased by 13.9% compared to 9M CY22.

Margins improvement in Europe business was driven by big stock generation for summer period and stabilization of energy prices. Going forward, management expects steady business in Europe.

Company is looking at four major orders, out of which two relates to metal Castello. Company expects all these orders to ramp up in 2024 and contribute to growth.

Company is well aligned with future, as approximately 50% of new orders relates to EVs in Europe and approximately 10% in India.

Company expects capex to be in range of 5-6% of total sales for CY23. Company’s capex is concentrated mainly in India and Mexico.

Management intends to improve margins driven my focus on internal efficiencies.

On 16th Oct 2023, company completed 100% stake sale by CIE Forging Germany GmbH (CFG) in its subsidiaries namely Jeco Jellinghaus GmbH (JECO), Gesenkschmiede Schneider GmbH (GSA), Falkenroth Umformtechnik GmbH (FUG) and Schoneweiss & Co. GmbH (SCG) to Mutares SE & CO (the Buyer).

PAT includes Rs 335.6 crore of profit from discontinued operations (CFG). This profit includes a one time impact of approximately Rs 11 lakh of settled insurance claim and others. PAT also includes Rs 209 crore of Foreign Currency Translation Reserve (non-cash) credited to P&L on sale of German business.