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Mahindra CIE Automotive: Buy for 29% upside in 1 year - IndiaNotes.com
Mahindra CIE Automotive: Buy for 29% upside in 1 year
Rudra Shares and Stock Brokers | Published: 13 Jul, 2017  | Source : IndiaNotes.com

Company Overview


CIE Automotive is an industrial group specialized in managing HIGH VALUE-ADDED PROCESSES, and is supplying components and subassemblies for the automotive market. It has presence in 4 continents and 15 countries.


CIE Automotive focuses its resources on three strategic business areas:

  • Automotive components (with 6 basic technologies – Aluminum, Forging, Stamping and Tube Welding, Machining, Plastic and Casting, present in 9 countries).
  • Biofuels, (with biodiesel plants operating in Spain and Italy, presence in Brazil and Guatemala, and its own sales network) and
  • Dominion, Technological solutions and services (with plants in Spain, Mexico, Brazil, Argentina and Chile)


Valuation Conclusion


Quantum of orders from Chakan, going forward will be something close to Rs.  25 crores -Rs.  30 crores, expects next quarter to give even better EBITDA margin as the volumes will go up because no more demonetization effect would be seen on account. The actions (such as improving operational efficiencies, close monitoring, improving price realization and reduction in people) have been initiated by the management under guidance of CIE’s European Technical team to improve the operations. Further, the Company is looking forward to growth opportunities in India and would likely double the market cap by 2020.


Based on the overall economic indicators in India and a normal forecast for the monsoon this year, Company remain optimistic about its performance in next quarter. Moreover, with the acquisition of Bill Forge & that Bill Forge Mexico has already started production, sales is two month ahead of schedule and it is already running three shifts and the demand is very strong bring about the positive indicators for the company to grow further.


Estimating the share price of the company as per P/E valuation, putting the estimated P/E of FY17E at 37x & the estimated EPS at Rs.  8.29., the estimated share price for next 1 year tenure turns around to be Rs.  308. Therefore, we recommend to BUY this script.

 

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About Rudra Shares and Stock Brokers

RUDRA is one of the growing & dynamic brokerage houses with a strong presence in the Retail and HNI broking segment. With over 25 years of experience and lead by a team with outstanding managerial acumen, RUDRA is a professionally managed company supported by over 100 professionals, including Chartered Accountants, MBAs and other senior executives. RUDRA can thereby cater to its clients' short-term as well as long-term financial needs through a comprehensive bouquet of investment services. RUDRA offers a diverse range of financial services, including institutional and retail brokerage of Equity, Currency, Commodities, Derivatives, Online Trading, Depository Services, Fixed Deposits, IPOs and Mutual Funds Distribution, and Wealth Advisory & Research. RUDRA is looking to become one of the biggest broking houses. RUDRA Securities Limited, is a member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited, MCX Stock Exchange, and Depository Participant of Central Depository Services (I) Limited. RUDRA can be approached online at www.rudrashares.com.

 

For more information please write in to editor@indianotes.com

Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.

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