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CIE Automotive India Ltd’s shares are up about 7% since its December quarter (Q4CY25) results last week, as growth momentum continued to gather pace.

Consolidated revenue increased by 13% year-on-year, clocking the best growth in many quarters, to ₹2,393 crore on the back of a good show from the India business and a favourable exchange rate in Europe.

Reported Ebitda grew 12% to ₹335 crore. One-off costs such as the new labour code impact in India and restructuring expenses in Europe hurt Ebitda.

India revenues at ₹1,545 crore were the highest-ever quarterly sales, indicating demand is bouncing back and some issues pertaining to delayed orders and execution issues seen earlier during the year are now getting resolved.

Looking ahead, growth would be led by India amid improving demand after the goods and services tax (GST) rate cuts. Besides, OEMs (original equipment manufacturers) are launching new models, which helps auto component suppliers like CIE.

The company added new orders worth about ₹870 crore in 2025, aiding revenue visibility. Importantly, CIE is expanding capacity across forgings, aluminium castings, composites, stampings and gears. This signals management’s confidence on volume prospects.

Europe remains the weak point. Revenue grew 21% year-on-year to about ₹782 crore. But here, the exchange rate translation impact was 17%, so sales growth in euro terms was just 4%. Demand conditions are dull in Europe.

Light commercial vehicle production is expected to be flat-to-slightly negative in 2026. Positively, a good part of the restructuring is now behind. The management intends to protect margins more than chase growth. Europe’s Ebitda margin of around 13% is lower than India’s 17%, but the region is now more stable and unlikely to be a drag on overall numbers ahead.

CIE notes that growth trends in 2025 accelerated in the second half of the year, aided by India. As volumes rise, the management expects India's margins to gradually improve due to operating leverage.

The company is net cash positive and generates healthy free cash flows, offering flexibility to invest in growth without hurting the balance sheet and lowering the risk of dilution or aggressive borrowing.

CIE’s shares are up about 20% in the past one month. The recent rally looks like the Street is pricing in a better 2026–2027. At valuations of 17.5x times FY27 estimated earnings, the stock won’t look too pricey if this recovery sustains.

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