CIE Automotive India Limited — Q2 FY26 earnings call

Call held 17 Oct 2025

Management summary

CIE Automotive India reported its highest ever quarterly sales for India operations in Q3 CY25, with a 9% YoY growth, outperforming the market. Consolidated sales grew 12% YoY, but margins faced pressure in India due to energy tariffs and in Europe due to a stagnant market. The company is focused on improving profitability in its aluminum division and navigating structural challenges in the European auto market.

Highlights

  • India business sales at INR15,232 million, marking the highest ever quarterly sales reported.

  • Indian operations grew 9% year-on-year in Q3 CY25, significantly higher than weighted average market growth.

  • European sales grew 18% over Q3 CY24 to INR7,866 million, aided by an 11% positive exchange rate effect.

  • Consolidated sales for Q3 CY25 reached INR23.1 billion, representing a 12% growth over Q3 CY24.

  • Aluminum division margins are improving from 10% (in 2019) to around 15% currently, with further improvements expected.

Concerns

  • India EBITDA margin was 17.3%, lower both year-on-year and sequentially, mainly due to a 0-0.5% impact from energy tariff increases in Maharashtra.

  • European EBITDA margin for Q3 CY25 was 14.1%, lower on a year-on-year basis.

  • The European market remains structurally stagnant with challenges like stagnant EV penetration, environmental penalties for ICE vehicles, and increasing threat of Chinese imports.

  • Mexican EV program growth is expected to be 'a little bit below expected' for the next 2-3 years due to US subsidy elimination.

Key financials

2 periods

Q3 CY25

  • Consolidated Sales
    ₹2,310 Cr
    YoY +12%
  • Consolidated EBITDA Margin
    16.2%
  • India Sales
    ₹1,523.2 Cr
    YoY +9% QoQ +4.5%
  • India EBITDA Margin
    17.3%
  • European Sales
    ₹786.6 Cr
    YoY +18%
  • European EBITDA Margin
    14.1%

9M CY25

  • Consolidated PAT Margin
    9.2%

What they filed

Q1 FY27: revenue up 10.0%, net profit up 17.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,136 1,119 1,163 1,204 1,254 +10%1,274 +14%1,332 +15%1,325 +10%
EBITDA185 170 186 183 199 +8%195 +15%219 +18%213 +16%
Net profit124 116 219 127 138 +11%134 +16%234 +7%149 +17%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Sales (Q3 CY25)
₹2,309.8 Cr Total
  • India Operations ₹1,523.2 Cr 65.9%
  • European Operations ₹786.6 Cr 34.1%

Capital allocation

low confidence
  • Debt Debt disclosed
    • Repayment Money from Galfor (German operations sale) used to retire debt in Mexico.
    No, we have no reason to repatriate it into India. We use that money to fund, to retire the debt in Mexico.

Guidance & targets

Market Growth

  • India 3-year growth CAGR Market Growth · next 3 years · Medium confidence 2.5% to 3%
    As vehicles become affordable, most estimates suggest that the three-year growth CAGR could improve by 2.5% to 3%.

    — Vikas Sinha

  • India Passenger Vehicle Market 3-year CAGR Market Growth · next 3 years · Medium confidence 5% to 6%

    Previously 2% to 3% → 5% to 6%

    For example, the passenger vehicle market, which was expected to grow at a 3-year CAGR of 2% to 3%, which was the earlier forecast, now this could increase to 5% to 6%.

    — Vikas Sinha

  • India Two-Wheeler Market 3-year CAGR Market Growth · next 3 years · Medium confidence similar 2% to 3% points increase
    And similarly, the earlier predicted 3-year CAGR of two-wheeler market could also increase by similar 2% to 3% points.

    — Vikas Sinha

  • European Light Vehicle Market Growth (IHS Forecast) Market Growth · CY26 · Medium confidence -1.5%
    In fact, that C'26 forecast by IHS of the light vehicle market in Europe is roughly about (-1.5%) and roughly the same for trucks.

    — Vikas Sinha

  • European Truck Business Growth (IHS Forecast) Market Growth · next year · Medium confidence 5%
    So, again, the forecast as far as I see for the truck business, IHS is forecasting roughly about 5% next year.

    — Vikas Sinha

Margin

  • India EBITDA Margin Impact from Energy Tariff Margin · next few quarters · Medium confidence 0% to 0.5% offset
    So the impact is in the range of 0% to 0.5%, which we will try and offset.

    — Vikas Sinha

Market Share

  • Indian Revenue in High-Risk US Tariffs Category Market Share · High confidence 1%
    Roughly about 1% of the revenue of Indian operations are in the high-risk category from US tariffs.

    — Vikas Sinha

Market Production

  • European Light Vehicle Production Market Production · next few years (2025, 2026, 2027) · High confidence 16 million to 17 million units
    for the next few years, we expect the production of light vehicles in Europe to remain in the range of 16 million to 17 million. That is the forecast.

    — Vikas Sinha

What to watch in Q3 FY26

India EBITDA Margin Recovery

next few quarters
Current 17.3% (Q3 CY25), impacted by 0-0.5% due to energy tariffs
Target Offsetting the energy tariff impact and improving margin

Why it matters

Directly impacts the profitability of the largest segment and demonstrates management's ability to mitigate cost pressures.

The EBITDA margin in India for the quarter was 17.3%, lower both year-on-year and sequentially, mainly due to the energy tariff increase in Maharashtra, where many of our plants are located. We are working on improving our profitability to offset part of this cost increase in the next few quarters. So the impact is in the range of 0% to 0.5%, which we will try and offset.

Risks & concerns

  • Stagnant European Automotive Market

    high

    Complex situation with stagnant EV penetration, environmental penalties for ICE vehicles, and increasing threat of Chinese imports, leading to low volumes and excess capacity.

    Management acknowledged

  • Energy Tariff Increase in Maharashtra

    medium

    Impacted India EBITDA margin by 0-0.5% in Q3 CY25, company is working to offset this cost increase.

    Management acknowledged

  • Mexican EV Program Growth Below Expectations

    medium

    Growth for a significant EV program is expected to be 'a little bit below expected' for the next 2-3 years due to subsidy elimination in the US.

    Management acknowledged

  • Rising NBFC NPAs Impact on MHCV Demand

    medium

    Potential negative impact on MHCV demand as a large majority (3/4th) of trucks are financed, though other market factors are also at play.

    Analyst acknowledged

  • US Tariffs on Auto Components

    low

    25% on light vehicle components, 50% on trucks/tractors/off-highway; approximately 1% of Indian revenue is in the high-risk category.

    Management acknowledged

Q&A highlights

4 direct, 1 evasive
Aluminum Business Margins Direct
Two things I would point out here. And the first, at CIE, and this is a philosophy that CIE follows worldwide, it does not matter whether it is EV or ICE, we work towards the same margins. There is, in fact, whether it is EV, ICE, or whichever segment that we operate in, or whether we operate from this geography or that geography, there is a base level EBITDA margin that we work towards. So, we don't believe that one segment should be at a lower margin forever compared to other segment.

Management clarifies their strategy to maintain consistent EBITDA margins across all segments (EV/ICE, aluminum/ferrous), indicating no structural margin disadvantage for aluminum.

Asked by Siddhant Dand

KTM Exposure and Export Opportunity Evasive
Siddhant, this is a specific point. I'll have to check this and get back to you.

Management was unable to provide immediate clarity on exposure to KTM in Europe and potential for increased Indian exports, indicating a lack of immediate data or a need for internal verification.

Asked by Siddhant Dand

Mahindra & Mahindra Contribution to India Business Direct
The last that we have compiled the data, Mahindra is close to about a third of our business in India.

Provides a key customer concentration metric for the India business, highlighting the significance of M&M.

Asked by Abhishek Kumar Jain

European Business Growth Outlook Partial
As I explained in my opening remarks, I think the European market is similar to earlier quarters. The light vehicle market in Europe, as I said, grew by 0.3% this quarter. And on a nine month basis, the light vehicle market in Europe has actually de-grown by about 2%.

Management reiterates the challenging and stagnant nature of the European market, despite some optical improvements due to a low base, suggesting continued headwinds.

Asked by Abhishek Kumar Jain

Metalcastello Operations and US Supply Direct
Now, we are at about 45 million euros turnover per year. That is the range where we are. And we think that this will be a stable figure. We are exporting to the US, to our main customer, Caterpillar, in a, let's say, smooth ways.

Clarifies the current stable state of Metalcastello's operations after restructuring and its key export relationship with Caterpillar, indicating a recovery from previous volume drops.

Asked by Sridhar Kalani

Inclusion of Sunroof Business in CIE India Direct
Sridhar, we have explained this in the past. I think the basic logic was that this is a tier 1 kind of business with a lot of design support required, which they get from a centralized team and therefore it is run as a separate global unit within CIE and that's the reason why it has been kept separate.

Addresses a recurring question from minority shareholders regarding the exclusion of a fast-growing business from the listed entity, explaining the strategic rationale for its separate operation.

Asked by Sridhar Kalani

Impact of GST Cut on Vehicle Demand Partial
But it is a very significant move and it is a welcome move. And it will have an impact. It will not be a one-time impact of just 2 or 3 months. It will have a longer-term impact is what our assessment is at this point of time. But how much? We will have to wait and watch because as of now, there are two things that have happened, which is the reason why I am saying we have to wait and watch.

Management views the GST cut as a structural, longer-term positive for affordability and demand, but cautions that its full impact needs to be observed due to overlap with festive season and inventory corrections.

Asked by Rajakumar Vaidyanathan

NBFC NPAs and MHCV Segment Impact Partial
So will lack of financing have an impact on trucks? Yes, it will have an impact. We'll have to get into further details of what is happening on the NBFCs, but will it have an impact? Yes, it will have an impact because it is a financed business, no doubt, I think the large majority of trucks, maybe 3/4th of trucks are financed.

Acknowledges the potential negative impact of rising NBFC NPAs on the MHCV segment due to high financing dependence, but also highlights the complexity of the truck market with many other influencing factors.

Asked by Rajakumar Vaidyanathan

3 min read 6 chapters

Detailed narrative

Strong Q3 CY25 Performance for India Operations

CIE Automotive India's India business achieved its highest-ever quarterly sales at INR15,232 million in Q3 CY25, representing a 9% year-on-year growth. This performance significantly outpaced the weighted average market growth and marked an improving trajectory from 3% in Q1 and 7% in Q2. The growth was supported by new orders coming back online and generally good market conditions, with light vehicle production growing 5.6%, two-wheelers 10-10.5%, and tractors 14%.

European Operations Face Structural Headwinds

European sales for Q3 CY25 reached INR7,866 million, an 18% increase over Q3 CY24, though 11% of this growth was attributable to positive exchange rate effects. Despite this, the underlying European market remains structurally stagnant. Light vehicle production grew only 0.3% in Q3 CY25 and de-grew 2% for the 9M CY25 period. The market continues to be complex due to stagnant EV penetration, environmental penalties for ICE vehicles, and increasing competition from Chinese imports, with light vehicle production expected to remain flat at 16-17 million units for the next 3-5 years.

Consolidated Financials and Margin Pressures

Consolidated sales for Q3 CY25 stood at INR23.1 billion, reflecting a 12% growth over Q3 CY24. The consolidated EBITDA was INR3.75 billion, resulting in a margin of 16.2%. However, the India EBITDA margin was 17.3%, lower both year-on-year and sequentially, primarily due to a 0-0.5% impact from energy tariff increases in Maharashtra. The European EBITDA margin was 14.1%, lower year-on-year but higher sequentially, indicating ongoing efforts to defend margins in a challenging market.

Strategic Focus on Aluminum Business and EV

CIE Automotive India maintains a philosophy of achieving similar EBITDA margins across all segments, regardless of whether they are EV or ICE components, or aluminum versus ferrous. The company's aluminum division has seen its margins improve from 10% in 2019 to approximately 15% currently, with further improvements expected through efficiency gains and the acquisition of higher added-value components. The company is actively involved in EV components, including aluminum, gears, forgings, and stampings for four-wheelers, and races for two-wheelers, serving market leaders.

Impact of GST Reforms and US Tariffs

Management believes the recent GST reforms in India will structurally improve the 3-year growth CAGR for the passenger vehicle market from 2-3% to 5-6%, and for two-wheelers by 2-3 percentage points. However, the immediate impact is being observed cautiously due to its overlap with the festive season and ongoing inventory corrections. Separately, US tariffs, at 25% for light vehicle components and 50% for heavy vehicles, pose a dampener, though only about 1% of CIE India's revenue is categorized as high-risk from these tariffs.

Mexican Operations and EV Program

The Mexican business currently generates a turnover of approximately 3-3.5 million euros per month and is stable. A significant EV program awarded by an American OEM in Mexico is now expected to grow 'a little bit below expected' over the next 2-3 years due to the elimination of US subsidies for battery electric vehicles. Despite this, the company maintains a strong relationship with key customers like Caterpillar for exports from Metalcastello, and expects recovery in the mid-term for off-highway vehicle business.

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