CIE Automotive India growth and order wins offset European market softness

Investment View and Valuation

In its October 23, 2026 results update on CIE Automotive India Ltd, ICICI Securities maintained its BUY recommendation and reduced its target price to Rs 475 from Rs 485. The revised target is based on 16x September 2028E EPS. The broker considers valuation supportive and expects India to drive overall growth, while European operations are likely to remain soft.

Q3CY26 Financial Performance

CIE Automotive India reported Q3CY26 consolidated revenue of Rs 26,332 million, up 11 per cent YoY and broadly stable QoQ. Revenue was 1 per cent below ICICI Securities' estimate. EBITDA was Rs 3,739 million, up 5 per cent YoY but down 4 per cent QoQ, and was 5 per cent below the broker's estimate. EBITDA margin fell 80 bps YoY and 70 bps QoQ to 14.2 per cent, 50 bps below estimate, because cost inflation was higher than expected. Adjusted PAT from continuing operations was Rs 2,427 million, up 14 per cent YoY and 3 per cent QoQ, which was 3 per cent above the broker's estimate.

India Business: Growth and Capacity Expansion

The India business delivered revenue growth of 18 per cent YoY to Rs 18,010 million in Q3CY26, supported by strong underlying volumes across segments. India EBITDA was Rs 2,940 million and the EBITDA margin was 16.3 per cent, down 100 bps YoY and 40 bps QoQ. Management attributed the margin decline to inflation in raw materials, energy and consumables.

Management aims to outperform industry growth through new programme commencements and ramp-ups with anchor and non-anchor customers, including a large export order for iron castings. CIE Automotive India is expanding capacity in its iron foundry, stampings and forgings verticals and has increased capex intensity to support new order wins and medium-term growth. The company secured new order wins of about Rs 9,700 million during 9MCY26, while dispatches for the large export iron-casting order commenced in October 2026.

European Operations

Europe revenue declined 4 per cent YoY to Rs 7,575 million, with real sales growth falling 10 per cent YoY and favourable foreign exchange partly mitigating the decline. ICICI Securities attributed weak real sales to subdued European demand, reduced volumes after renegotiation with a key customer, greater Chinese competition and rising electrification.

European light vehicle and medium and heavy commercial vehicle performance was broadly flat YoY in Q3CY26. Europe EBITDA margin nevertheless improved 230 bps YoY to 16.3 per cent due to restructuring savings. Management has indicated a cautious medium-term outlook for European industry demand.

Estimate Revisions and Forecasts

Following the quarterly performance, ICICI Securities reduced CY26E, CY27E and CY28E revenue estimates by 0.5 per cent, 1.4 per cent and 1.4 per cent, respectively. EBITDA estimates were reduced by 2.7 per cent, 2.7 per cent and 1.4 per cent, while EPS estimates were cut by 2.7 per cent, 2.8 per cent and 1.4 per cent.

Key Downside Risks

• European demand remaining sluggish beyond CY26.
• Delays in the ramp-up of new projects.