Mahindra CIE Automotive (MCIE) reported decent Q4CY20 results on the operational front. Consolidated revenues rose 13.6% YoY to Rs. 1,958 crore (India up 14.6%, Europe up 9.4%). EBITDA margins for the quarter were at 12.6% (up 371 bps QoQ). India EBIT margins were up 250 bps QoQ to 9.9%, with Europe margins up 150 bps QoQ to 6.8%. Consolidated PAT was at Rs. 112 crore vs. Rs. 12.6 crore in Q3CY19 (base quarter hit by higher tax outgo, exceptional charge).
Valuations & Outlook
Over the medium to longer term, MCIE is seen benefitting from opportunities in the form of PLI scheme and supply chain diversification away from China. We value MCIE at Rs. 220 (i.e., 8x CY22E EV/EBITDA; previous target Rs. 170) and maintain BUY. We believe MCIE is available at reasonable relative valuations considering its track record of industry-beating growth, strong cash generation profile (10%+ CFO yield at CMP).
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_MahindraCIE_CoUpdate_Feb21.pdf
Shares of Mahindra CIE Automotive Limited was last trading in BSE at Rs.179.15 as compared to the previous close of Rs. 179.7. The total number of shares traded during the day was 40581 in over 893 trades.
The stock hit an intraday high of Rs. 184.1 and intraday low of 178.1. The net turnover during the day was Rs. 7329985.