CIE Automotive India hosted a conference call on May 3, 2024. 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

In India, tractors sales during Q1 CY24 decreased by 15.1%, two wheelers sales increased 26.4%, MHCV sales decreased 15.8% and <6T vehicles (include Passenger Vehicles, Utility Vehicles, Vans and Light Commercial Vehicles) went up by 6.6% compared to Q1 CY23.

All businesses in India are performing well especially light vehicles and two wheelers. Management expect two-wheelers and light vehicle demand momentum to continue in coming quarters. Tractor demand should recover from Q3 CY24.

In Q1 CY24, the company reported positive one off from extra subsidy in CACIL of Rs 22 crore, approx. 1.5% points of non-recurrent EBITDA.

Management expects India business to surpass expectations in the future, driven by overall industry growth, demand-backed Capex, and increased orders from OEMs.

In Europe, <6T vehicles sales during Q1 CY24 decreased by 3.1% compared to Q1 CY23. Growth was hampered in Europe due to low market performance and sales reduction in Metalcastello because of US market drop.

Management expects Europe business to report flattish growth in CY24.

Europe business EBITDA margin dropped due to sales slowdown and stock reduction in Q1 CY23. Management expect Europe business margin to recover in Q2 CY23.

Company expects India verticals to grow in 2024 supported by new project ramp up.

Light-weighting and safety concerns will push the industry towards AL castings and composites, which are strong, focus areas for the company.

Company expects capex to be in range of 5% of total sales for CY24. Company’s capex is concentrated mainly in India and Mexico.

Management aims to improve margins driven my focus on internal efficiencies.

On 29 Jan 2024, the company entered into a share subscription and shareholders agreement (SSSHA) through CIE Hosur (CHL), its wholly-owned subsidiary with Ojaha Renewables (ORPL). CHL has invested an aggregate amount of Rs 16.2 million for setting up captive solar power generating plants with aggregate capacity of 4.5 MWp which constitutes 27.89% of the paid up share capital of ORPL.