Buy Mahindra CIE Automotive, target price Rs 296: ICICI Securities

ICICI Securities has buy call on Mahindra CIE Automotive with a target price of Rs 296. The current market price of Mahindra CIE Automotive is Rs 221. Time period given by analyst is one year when Mahindra CIE Automotive Ltd. price can reach defined target.

Mahindra CIE Automotive Ltd., incorporated in the year 1999, is a Mid Cap company (having a market cap of Rs 8475.28 Crore) operating in Auto Ancillaries sector.

Mahindra CIE Automotive Ltd. key Products/Revenue Segments include Automotive Accessories, Other Operating Revenue and Sale of services for the year ending 31-Dec-2021.



Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 2599.10 Crore, up 24.87 % from last quarter Total Income of Rs 2081.39 Crore and up 17.67 % from last year same quarter Total Income of Rs 2208.76 Crore. Company reported net profit after tax of Rs 161.04 Crore in latest quarter.

Investment Rationale
MACA is a well-diversified MNC play with dominant India contribution (~55% PBT share in CY21). With parent CIE’s capability to service global EV OEMs, the brokerage believes it is a matter of time MACA would also start making EV components for EU PV market. The stock is trading at ~7% forward FCF yield with a lean balance sheet. It maintains BUY on MACA at Rs296/share (earlier: Rs287) based on DCF, implying ~14x CY23E P/E.

Promoter/FII Holdings
Promoters held 72.17 per cent stake in the company as of 31-Mar-2022, while FIIs owned 10.66 per cent, DIIs 7.37 per cent.