CIEINDIANSEJuly 22, 2025

CIE Automotive India Limited

8,294words
79turns
8analyst exchanges
6executives
Management on call
Ander Arenaza Alvarez
CHIEF EXECUTIVE
K. Jayaprakash
CHIEF FINANCIAL OFFICER – CIE AUTOMOTIVE INDIA LIMITED
Vikas Sinha
SENIOR VICE PRESIDENT
Oroitz Lafuente
BUSINESS CONTROLLER – CIE AUTOMOTIVE INDIA LIMITED
Swapnil Soudagar
DGM STRATEGY – CIE AUTOMOTIVE INDIA LIMITED
Vishakha Maliwal
ICICI SECURITIES LIMITED
Key numbers — 40 extracted
INR14.5 billion
We start with the India operations, which is on Page 6. In Q2 C '25, India business sales were at INR14.5 billion, which has grown at 7% year-on-year versus Q2 C '24 and marginally higher on a sequential basis.
7%
which is on Page 6. In Q2 C '25, India business sales were at INR14.5 billion, which has grown at 7% year-on-year versus Q2 C '24 and marginally higher on a sequential basis. The growth is also high
5%
ments, the market growth in Q2 C '25 for light vehicles and 2-wheelers was sluggish. It was below 5%, but tractors and trucks recorded healthy growth. With the prediction of a good monsoon, market
17.5%
hat's how we look at the market going forward. Now the EBITDA margin in India for the quarter was 17.5%, just marginally lower year-on- year and sequentially. This is largely due to product mix issues.
18.6%
This is largely due to product mix issues. We should also note that the reported EBITDA margin of 18.6% in India in Q1 C '25 included a one-time government grant at our Stampings business, and without
18%
at our Stampings business, and without that, the India Q1 C '25 EBITDA margin was roughly about 18%. On Page 7, we have the results for the European operations of CIE India in Q2 C '25. Sales were
INR8.3 billion
n Page 7, we have the results for the European operations of CIE India in Q2 C '25. Sales were at INR8.3 billion, which are down year-on-year by 1%, but that includes a positive exchange rate effect of 7%. With
1%
operations of CIE India in Q2 C '25. Sales were at INR8.3 billion, which are down year-on-year by 1%, but that includes a positive exchange rate effect of 7%. Without the effect of raw material pric
4%
l prices drop also, the real drop in sales volume in Europe was 4% in Q2 C '25. This is an improved performance compared to the double- digit reduction in sales that
2%
been some improvement in the market situation with the Light Vehicles market being down by only 2% in Q2 C '25. The reduced base effect has also played a part in this improvement. But overall, the
12.5%
mething we'll have to keep in mind. The EBITDA margin in the European business for Q2 C '25 was 12.5%. Now, this includes a onetime restructuring cost at Metalcastello without which the margin would
15%
onetime restructuring cost at Metalcastello without which the margin would have been closer to 15%. We have been taking proactive corrective actions to adjust our operations to the difficult marke
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Guidance — 20 items
Vikas Sinha
opening
“So steady, but of course, with a wait-and-watch attitude, that's how we look at the market going forward.”
Vikas Sinha
opening
“Given the prospects of a good monsoon and the upcoming festive season, we expect H2 to be better than H1 in India.”
Vikas Sinha
opening
“Going forward, we are confident that we can utilize future opportunities and face future challenges with agility.”
Vikas Sinha
opening
“We believe that we are well prepared to face any situation going forward.”
Ander Alvarez
qa
“So let's say that we are now in the valley of the sales, we can expect that the market will continue in this level during the next 1 or 2 quarters, but our customers are already saying us that they expect a certain recovery by beginning next year.”
Rajas Joshi
qa
“So when do we expect our India plus -- our export business growth to reach double digit?”
Rajas Joshi
qa
“Should we expect a lower capex for CY '25 or higher capex in the second half to meet the 5% to 6% of revenue capex guidance?”
Ander Alvarez
qa
“So we will be close to this 5% in the complete year.”
Ander Alvarez
qa
“And regarding -- in India, we expect also to improve slightly the margins in the next quarters, thanks to the growth that we expect because we think that with a good monsoon and the festive season coming, we can expect certain recovery on sales and higher recovery, and that will support our margins, too.”
Ander Alvarez
qa
“So we expect to grow importantly in the casting exports in the next, I would say, from the beginning next year, okay?”
Risks & concerns — 15 flagged
With the prediction of a good monsoon, market is expected to remain steady, if not better than this, but we'll need to watch out for issues that may have negative impact like the potential tariffs from the US government or the impact of restriction on rare-earth magnets by China.
— Vikas Sinha
But overall, the market situation in Europe continues to be difficult.
— Vikas Sinha
We have been taking proactive corrective actions to adjust our operations to the difficult market conditions, and this is a reflection of that.
— Vikas Sinha
The impact of declining vehicle sales and slowdown at Metalcastello has contributed to 11% drop in sales to INR16.2 billion.
— Vikas Sinha
Regarding European market, we can say that the European, let's say, both passenger car and commercial vehicle markets are quite weak.
— Ander Alvarez
So let's say that the market will continue weak and we will continue in this level.
— Ander Alvarez
We are controlling the capex because of the, let's say, weak situation of the market.
— Ander Alvarez
Like right now, the market situation in Europe continues to be difficult.
— Vikas Sinha
So we continue to assume that the market in Europe will be difficult, and we will continue to focus on restructuring profitability, etcetera.
— Vikas Sinha
But it's painful for the workers, it's painful for the management also because it's very difficult to organize the production, okay?
— Ander Alvarez
So there is always a risk of more pricing competition in existing areas.
— Vikas Sinha
So let's say that it is that the risk is the lot of capacity that there are in the market.
— Ander Alvarez
So now we need to navigate in this weak market situation, and that's what we are now trying to solve, entering into other customers and offering our capacities to the different customers in -- both in Europe and in the US
— Ander Alvarez
Now that's very, very difficult to specify because we are in many areas.
— Vikas Sinha
So what I'm trying to say is, we have a twin challenge not only have to -- have we to retain our strong share of businesses in some of the areas where we have been market leaders for long, and we are doing that by doing -- by improving our offerings in terms of precision and so on and so forth.
— Vikas Sinha
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Q&A — 8 exchanges
Q
So just a bit more, could you elaborate on the growth outlook for the second half, as you mentioned it to be better? Do you -- any segment you see would be growing faster than our underlying industry, specifically for India business? And additionally, has European business stabilized now?
Vikas Sinha
I'll talk about India, and then, I'll request Ander to talk a bit about Europe. In India, of course, you see that 4-wheelers and 2-wheelers are roughly around 3% to 5% growth. Tractors are doing well and probably will continue to do well because of the monsoon situation, both tractors and trucks. That is how we look at it. I think it's not that there is one segment or the other, which is driving this growth. Overall, our -- we had talked about some of our order book was delayed. I think what we are -- what you are seeing is a gradual coming back of that order book. It has -- whatever delay was
Q
Sir, last quarter, in our India business, we had made this comment that we had appointed new head of business development and also we were kind of refocusing back on anchor customers versus the tail that we kind of were trying to target 2, 3 years back. So some color, some highlights how the same is progressing?
Ander Alvarez
No, we have started this activity. We have the new business development head working properly and also contacting all the customers. We have a scheduled and weekly review with all the COOs -- sorry, CEOs and the, let's say, business development heads. So we are actively working on that. So I can say that we are very positive. We are very optimistic with these activities that we are having, and we will see results soon, okay? In fact, I'm also personally involved in all these weekly meetings, and also, I'm personally involved visiting the different purchasing directors of our -- all our custome
Q
I joined a bit late. I might have missed, sorry for repeating maybe. Just going by the P&L, your stand-alone other expense look quite on the higher side. Any one-offs in that or any specific reason?
K. Jayaprakash
No, Basu, there were some reclass of raw material to other expense. Okay. But overall, also margin got impacted slightly on a sequential basis. In the standalone -- yes, yes, in India, it is. As Vikas explained, it is more to do with the mix. We have more of growth in Stampings. So that's the only reason there. And I think -- I mean, we should be back at our normal margins. Second thing, sir, if I look at the presentation, in the consolidated cash flow statement, working capital variation showing INR590 crores of cash outflow, which is consuming more than the operating cash flow. So any specif
Q
Just a couple of questions. One is just to extension of what Basu was talking about the new product development. So we always -- I mean, whenever we talk about the new product development itself, so as in the crankshaft we have been doing since ages, this is may be complex, but we have been doing since ages. So what are the new products area where you want to enter or you have the capability to enter or we will be just improvising on the existing product line or the new segment on that product line? I mean, until and unless we move into the really new segment of the product lines, I mean, with
Vikas Sinha
Priya Ranjan, it's a good question that you are asking. So it has to be a mix of both. The things that I've talked about, the 2-wheeler crankshaft that I'm referring to, is very different. The moment you see it, maybe in the next -- like annual presentation, we'll put the photograph of that particular crankshaft. You will see it is completely different from what you would expect a crankshaft to look at. So it is something we are quite proud of. So you will have those kind of -- if you look at gears, for example, the EV gears are completely different from ICE gears. So yes, they are gears, but
Q
So sir, basically, I wanted to understand what is current capacity utilization we are having. And also, like we talked about on the new product side. So if we can give a little bit deeper knowledge on the content per vehicle, if there is a much increase from the existing product. So that will help us to understand better for the future recovery. And also, like you mentioned, H2 will be better than H1 led by the industry growth. So apart from the industry, what are all products and what are all OEMs that we are expecting good demand that will lead to better growth because also we wanted to unde
Vikas Sinha
Yes. Thanks, Jyoti. I'll try and answer the last of your questions first. Capacity utilization, I'll refer you back to Ander. On new -- first, where are we expecting, again, to reiterate, it is some of our own order book that is going to get us a boost. The market -- the reason why we are saying H2 market will be better than H1 market is purely because of the festive season. That is normally what you expect. The market itself is at a more middling kind of situation in India. But of course, we are looking at our order book ramp-up. New product development, we talked about that in the previous w
Q
So by listening the way you are saying about new product development and innovation and that is going to have some kind of growth in our future. So I would like to have one question that, can we expect that downside from here on will be -- we can say that -- it is a bottoming-out phase? Because as Ander mentioned that we are going to have some kind of stable possibility of H2 in a European business. And we have somewhere growth, yes, H2 would be better for India. So as far as your performance is concerned, we may see -- it's been bottoming out as far as worse is concerned. And secondly that we
Vikas Sinha
Like let's not talk about what exact number will emerge at the end of the year. Yes, we expect H2 to be better than H1 in India because, one, the market itself normally is better because of seasonal reasons, some of our order book is ramping back and you are clearly seeing that -- an improving growth performance over the last few quarters. So that's going to happen. . Europe, H2 in Europe is normally worse off than H1. You have to remember that August, you have 3 weeks, and in December, almost 10 days. So normally, H2 is lower by 15% from a market perspective itself compared to H1. So you have
Q
Okay. So thank you very much to all the participants for the good questions and for the interest in our company. We hope that we answered properly and you have now a better knowledge of how our company is deploying. And we expect to continue having the confidence and the trust in our company in the next quarters and next years. And I also thank to all our CIE India team, thanks for their commitment and the good job that they have done in all this period, and I expect to continue showing good results in the near future. Thank you very much, everybody.
Management
Q
Yes. Thanks, guys. Have a good day. Bye. Note: This statement has been edited to ensure quality
Management
Speaking time
Ander Alvarez
20
Vikas Sinha
16
Moderator
9
Rajas Joshi
8
Basudeb Banerjee
7
Priya Ranjan
6
Pratik Kothari
5
K. Jayaprakash
4
Devang Shah
2
Vishakha Maliwal
1
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Opening remarks
Vishakha Maliwal
Thanks, Nidhi. Good afternoon, everyone. Thanks to CIE Automotive India Limited management for giving us the opportunity to host the call. We have here in the call the senior management represented by Mr. Ander Arenaza Alvarez, CEO; Mr. K. Jayaprakash, CFO; Mr. Vikas Sinha, Senior VP, Strategy; Mr. Oroitz Lafuente, Business Controller; and Mr. Swapnil Soudagar, DGM strategy. Over to the management to take this ahead. Thank you.
Vikas Sinha
Yes. Thanks, Vishakha. This is Vikas. I welcome all of you on this call, as also Ander, our CEO. I will present CIE India results for Q2 C '25 and H1, the first half, of C '25. We start with the legal structure on Page 4 of our presentation. We would like to mention a change in this, where we have completed the formalities of liquidating Bill Forge Precision, and it has ceased to exist. We now move on to Q2 C '25 results. We start with the India operations, which is on Page 6. In Q2 C '25, India business sales were at INR14.5 billion, which has grown at 7% year-on-year versus Q2 C '24 and marginally higher on a sequential basis. The growth is also higher than the weighted average market growth. Among the various segments, the market growth in Q2 C '25 for light vehicles and 2-wheelers was sluggish. It was below 5%, but tractors and trucks recorded healthy growth. With the prediction of a good monsoon, market is expected to remain steady, if not better than this, but we'll need to watch
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