CIE Automotive India Faces Financial Challenges Amidst Low Sales and Profit Growth

CIE Automotive India, a midcap player in the castings and forgings industry, has recently undergone an adjustment in its evaluation. This revision reflects the company's financial performance metrics and market positioning over recent periods.
In the latest quarter, Q3 FY24-25, CIE Automotive reported net sales of Rs 2,109.95 crore, marking a notable low for the period. Additionally, the operating profit stood at Rs 299.27 crore, with the operating profit to net sales ratio recorded at 14.18%. These figures indicate challenges in maintaining growth, as the company has experienced a modest annual growth rate of 2.54% in net sales and 9.37% in operating profit over the past five years.

Despite a low debt-to-equity ratio of 0.10 times, which suggests a manageable level of debt, the company's return on equity (ROE) is at 12.5%. The stock is currently trading at a price-to-book value of 2.2, aligning with historical valuations of its peers. However, it has underperformed the broader market, generating negative returns of -11.51% over the past year, while profits have declined by 6.9%.

High institutional holdings at 25.23% indicate a level of confidence from larger investors, who have increased their stake by 0.53% in the previous quarter.

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