CIE Automotive

CIE India reported its highest-ever quarterly sales of ₹15,232 million in Q3 CY25, growing 9% YoY. This growth outperformed the weighted average market growth, which saw light vehicles grow by 5.6% and two-wheelers by 10.5%. Management noted that delayed orders are finally coming on stream, contributing to a sequential improvement trajectory from 3% growth in Q1 to 9% in Q3.

Europe revenue grew 18% YoY to ₹7,866 million, but management cautioned that this was largely due to a very low base in H2 CY24 and an 11% positive exchange rate effect. The underlying market remains stagnant, with light vehicle production growing only 0.3%. Management expects European production to remain flat at 16-17 million units annually through 2027, citing complex factors like stagnating EV penetration and Chinese import threats.

Management is highly optimistic about the recent GST structure optimization in India, predicting it will improve the three-year CAGR for passenger vehicles by 2.5% to 3%. This could push the sector's growth forecast from 2-3% to 5-6%. While the immediate impact is currently overlapping with the festival season, CIE views this as a structural change that will enhance vehicle affordability and long-term demand.

The aluminum division, which was acquired in 2019 with ~10% EBITDA margins, has improved to approximately 15%. Management is deploying European engineers to Indian plants to further enhance efficiency and reduce costs. The goal is to incorporate higher added-value components, such as higher tonnage machines and assembly activities, to bring margins in line with the broader group's standards.

CIE maintains a technology-agnostic approach, aiming for identical margins across EV and ICE segments. In India, the company is deeply integrated into the EV supply chain through aluminum, gears, forgings, and stampings for four-wheelers. Management emphasized that their 'races' business for two-wheelers is common to both ICE and EVs, ensuring stability regardless of the transition pace.