CIE Automotive India Ltd is struggling with a slowdown in its Europe business, which is adding pressure to overall profitability. Consolidated Ebitda margin fell 43 basis points year-on-year to 14.2% in the December quarter (Q4CY24). Ebitda thus declined 8.6% to ₹299 crore at a time when revenue dropped 5.8%. The company follows a January-to-December financial year.
Demand continued to slide in Europe, where revenue fell as much as 22%, driven by a 37.5% drop in medium and heavy commercial vehicle volumes and a nearly 10% decline in light vehicle sales. Stricter emission norms, policy uncertainty around electric vehicles (EVs), and production cuts by original equipment manufacturers have worsened the slowdown. Metalcastello, CIE’s European subsidiary, has been hit particularly hard, with monthly revenue run rates shrinking from €6-6.5 million to €4 million.
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Cost-cutting measures—including a reduction in the temporary workforce—have been implemented to aid profitability. Still, the Europe business margin was lower than expected at 15%. With EV adoption lagging earlier projections, CIE expects a meaningful turnaround only after the second half of calendar year 2025 as new orders translate into revenue.
India business holds the fort
Meanwhile, CIE’s India operations have been steady, with revenue rising 2% in Q4CY24. The company’s focus on higher-margin orders under AEL and Billforge is expected to drive stronger growth in 2025. Unlike its European counterpart, CIE’s India business has limited exposure to internal combustion engine components, positioning it well for an eventual transition to EVs.
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The company has an order book of ₹1,000 crore, with 25% tied to EV components. To capitalise on this, it allocated ₹210 crore for growth capex in 2024, alongside ₹180 crore for maintenance capex. Investment in new projects in India may accelerate in 2025, with CIE even exploring acquisitions in plastic components to enhance its portfolio.
But sustaining margins is a key challenge. The main question is whether CIE can scale its India business rapidly enough to offset the drag from muted European operations on its consolidated earnings. Or, will investors have to wait a while for a rebound?
This near-term pain in Europe is keeping sentiment subdued. The stock has shed more than 16% in 2025 so far, hitting a new 52-week low of ₹399.10 on Monday. Motilal Oswal Financial Services has cut its 2025 and 2026 earnings-per-share estimates by 4% and 11%, respectively, to account for weak demand, slow order ramp-up, and lower profitability. However, CIE remains focused on sustaining profitability through operational efficiencies, it said in a report on 21 February.
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