Ander Arenaza Alvare, CEO and K Jayaprakash, CFO of the company addressed the call.

Highlights of the call:

The company saw continuous sales and margin improvement

Consolidated Q1 CY19 results is best ever result in MCIE history in absolute value.

It achieved double digit EBIT % on consolidated basis.

Results are good in itself but better if one compares it with the subdued business situation.

The company continues to work with different customers with different technology.

In the month of March, Mahindra CIE Automotive acquired the business of Aurangabad Electricals Limited (AEL) through acquisition of 10 equity shares for an enterprise value of Rs 875.6 crore which included a future deferred payment estimated upto Rs 62.2 crore.

Aurangabad Electricals will give it entry in Aluminium die casting business. There is no overlapping of business with MICE.

Aurangabad Electricals has exports of 8-9%. The utilisation rate is high at 90-95% as market was growing fast. Its margins are below Mahindra CIE standard and the company is working to improve its margins to 15%.

Net debt as of March is Rs 675 crore.

Aurangabad Electricals has 20% business from PV and UV which is gradually increasing to 30%.

MICE will continue to invest in Aurangabad Electricals in CY 2019 and CY 2020.

Aurangabad Electricals accounts will be consolidated from next quarter onwards.

In Q1 Bill Forge was negatively impacted by slack 2 wheeler sales Bill Forge should see good sales and margins growth going forward as the Mexican business is likely to be good.

It hopes to improve margins for its German business.

European business sales growth was impressive at 15% in Q1. It was up 14% in Euros. The business saw ramping up from Caterpillar and CV growth of 5%. This business will grow well in next quarter but in H2 the European market will hold down a bit.

Indian business saw solid margin despite more than anticipated slowdown in the 2 wheeler market. From the next quarter Indian business should start revamping. Insurance and political uncertainty impacted 2 wheeler business. If the monsoon is normal as predicted, the Indian business can grow at 8-10%.

Indian business has improved marginally in April and May but customers are not willing to bet for more than 1-2 months.

The company will continue to work with focus on efficiency and productivity.

M&M, Maruti, Tata Motors and Hero MotoCorp combined constitute more than 50% of MCIE India business.

In FY 2020, cars and utility vehicles (UV) industry is pegged to grow moderately at 6-8% as per CRISIL report. It expects domestic tractor sales volumes to continue its growth momentum, and increase by 6-8% in fiscal 2020, assuming normal monsoon.

In Europe IHS Global has forecasted that the Passenger Vehicle production will grow at a slow but steady pace of 0.3% CAGR from 2018-2023. IHS Global has forecasted that the Medium and Heavy Commercial Vehicle production will grow at a steady pace of 4.3% CAGR from 2018-2023.