Mahindra CIE: Spectacular quarter

Mahindra CIE Automotive Ltd. Q1FY19 net sales grew 44.6% YoY to ₹650 crores v/s Rs 449.5 cr and EBITDA grew 90.9% YoY to ₹81.5 crores. EBIDTA margin expanded by ~300 bps YoY to 12.5%. PAT for the company grew by 148.4% YoY to Rs 43.9 crores. PAT margin expanded by ~280 bps YoY to 6.7%.

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What’s good about the company?

  • The company is expected to see a strong growth in profitability in Metalcastello.
  • The company is managed by CIE Automotive, one of the biggest Auto ancillary company of Spain.

Challenges faced by the company

  • The adoption of Electric vehicles in future can impact the profitability of the company. However as per the management the company is already working on the same.

How does it fare against peers?

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For Mahindra CIE, CY is considered not FY

Mahindra CIE (CMP: Rs 250, M.cap: Rs 9588 cr) has a PEG of 1.9x and FYROE of 12.7x which is unfavorable in comparison with peers.

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