CIE Automotive India hosted
a conference call on July 19, 2023. In the conference call, company was
represented by Mr. Ander Arenaza Alvarez- CEO, Mr. K. Jayaprakash- CFO and Mr.
Vikas Sinha- Sr. VP strategy.
Key
takeaways of the call
Management highlighted that all businesses
in India are performing well with positive expectations going forward.
Company witnessed Strong margin
improvement in India led by internal improvement actions.
In India,
tractors sales during Q2 CY23 decreased by 9.8%, two wheelers sales increased
1.3%, MHCV sales increased 6.3% and <6T vehicles (include Passenger
Vehicles, Utility Vehicles, Vans and Light Commercial Vehicles) went up by 2.7%
compared to Q2 CY22.
In India,
tractors sales during H1 CY23 increased by 8%, two wheelers sales decreased
0.8%, MHCV sales decreased 0.2% and <6T vehicles (include Passenger
Vehicles, Utility Vehicles, Vans and Light Commercial Vehicles) went up by 6.5%
compared to H1 CY22.
In Europe,
<6T vehicles sales during Q2 CY23 increased by 14.6% compared to Q2 CY22. Similarly,
<6T vehicles sales increased 16.5% YoY in H1 CY23.
In Europe, Margins
were positively affected mainly due to energy price reduction and Stock
generation for Q3.
Company’s Growing
capex is concentrated mainly in India and Mexico, as growth in Europe is
expected to be slow ahead. During the quarter ended June 2023, company’s Maintenance
capex was Rs 77.3 crore.
Most of the
capex is backed by commitments from company’s customers. Its customer base has
increased significantly over the years.
Company expects
capex to be in range of 5-6% of total sales for CY23.
The
management aims to outperform the industry going forward.
Company
recorded strong operative cash flow in both regions.
Company has received
orders from US OEMs for EV specific parts.
Going
forward, management expect passenger vehicles sales to continue growing and
expects improvement in 2Ws sales.
The company
is actively pursuing aluminium forgings for EV applications, specifically in
battery pack and chassis components.
Company is
focused on expanding its EV portfolio in Europe and India by forging close
partnerships with major European and Indian EV OEMs.
Currently, EV
contributes 3-5% to total revenue in Europe.
Profit from discontinued
operations mainly consist of one time insurance.
All regulatory approvals for name
change to CIE automotive has been received.
On 18 July
2023, board of directors of the company agreed to proposed plan of closure of
operation of BF Precision (BFPPL), as it is not in line with the Group strategy
of keeping the Group Entity structure simplified. The closure of operations is
expected to be completed within a period of 6 months.
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