undefined share price Management discussions


At the end of last year in December 2022, the Board of Directors of the Company at its meeting approved the proposal to change the name from Mahindra CIE Automotive Limited to CIE Automotive India Limited. Pursuant to legal and shareholder approvals the name of the Company has been changed to CIE Automotive India limited effective May 2023. In the same Board meeting (Dec22) the directors had also taken note of the proposal to find a buyer for the truck forgings business in Germany. Accordingly, the sale of the truck forgings business in Germany has been concluded on 16th October 2023. The financials of this entity are included in the results of the first two quarters as Income from discontinued operations.

The Company is a multi-location and multi-technology automotive components company with manufacturing facilities and engineering capabilities of its own and its subsidiaries in India and in Spain, Lithuania, and Italy in the European continent as well as a plant in Mexico, North America. It has an established presence in each of these locations and supplies to automotive Original Equipment Manufacturers (OEMs) and their Tier 1 suppliers. The Company is listed on the BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE) and currently has about 379 million shares listed.

The Company is part of the CIE Automotive Group of Spain, which has identified our companys Indian operations as a strategic growth driver for its global business. CIE India therefore draws from the vast and varied experience of the CIE Automotive Group in partnering and co-developing products for the rapidly evolving automotive industry.

We would like to also draw your attention to the fact that we have renamed our aluminium business to CIE Aluminium Casting Limited (formerly known as Aurangabad Electricals Limited). Set out below in Exhibit 1 is a graphical representation of the Company and its subsidiaries (together referred to as the Company in this report).

Exhibit 1: Legal Structure of the Company:

The list of subsidiaries and their ownership interest is provided in Exhibit 2.

Exhibit 2: The Subsidiary Companies of the Company as on 31st December, 2023

Subsidiary Companies Information

Sr. No. Name of the Subsidiary

Proportion of Ownership Interest Remarks

1 CIE Galfor S.A.#


1 UAB CIE LT Forge


Collectively known as CIE Forgings

2. CIE Legazpi S.A.


3. CIE Forging Germany AG*

100% Forgings, Germany

4. Metalcastello S.p.A.

99.96% Gears, Italy

2 CIE Aluminium Casting India Limited

100% (Formerly Aurangabad Electricals Limited)

3 BF Precision Private Limited


4 Bill Forge de Mexico S de RL de CV


Collectively known as Bill Forge

5 CIE Hosur Limited


Please note: * - These are dormant companies

Note: # - CIE Galfor SA is the holding company for all businesses in Europe GROUP OVERVIEW

CIE Automotive India Limited is a large, diversified auto-components group with presence across many processes/ product lines, geographies and customers. It manufactures complex components and sub-assemblies with significant vale add. CIE India is focused on the automotive market across and operates in four segments - light vehicles, commercial vehicles, two wheelers and tractors.

Our Company has multiple manufacturing facilities in India, Europe and Mexico. The manufacturing locations are optimally located close to major automotive manufacturing hubs to facilitate supplies to customers. In certain instances, we also provide services such as value analysis and value engineering to add value to the customers products. CIE Indias unique combination of specialization in high value-added products, which is usually delivered directly to OEMs and presence across multiple production technologies, also differentiates it from other component suppliers.

CIE India largely operates in the automotive markets of Europe and India. In Europe, the Company supplies components mainly to the light vehicles with a comparatively small business in the off-road sector. In India, The Company is more diversified and supplies components to the light vehicles segment (both passenger vehicles and light commercial vehicles), two wheelers, tractors, medium and heavy commercial vehicles, in order of dependence.

A brief description of the key businesses of the Company is presented in Exhibit 3. Exhibit 3: Lines of Business


Product Specialty Focus Areas Key Customers CY 2023 Revenue



Light Vehicles: Crankshafts, knuckles, constant velocity joints, tulips, steering shafts, steering yokes and wheel hubs

2 Wheelers: Steering races and engine valve retainers All parts are forged & machined

Light Vehicles,

Two Wheelers and Tractors

M&M, Maruti Suzuki India Limited, Tata Motors and Tata Motors (EV), Hero, Bajaj, HMSI and TVS, Ford, GKN,

NTN, Nexteer, Rane NSK, Renault Nissan,

KIA (EV), Hyundai, Stellantis (EV),

Ola Electric (EV)

In Rupees Million 21,849

Spain + Lithuania

Crankshafts, Common Rail, Stubs, Tulips Light Vehicles Renault, VW Group, Daimler, GKN, JLR, GM, Fiat, DAF, Bosch, NTN, Faurecia, Dana, ZF, BMW 27,470

Aluminium Castings


Crankcase, Pump Housing, Brake panel, Turbo cover, Housings used in EVs. (Parts made by high pressure & gravity die casting and then machined) Two & Three Wheelers, Light Vehicles, Commercial Vehicles Bajaj, Nidec GPM, Brembo, Mitsubishi, Bajaj EV, Nidec GPM (EV), Bosch (EV) 10,316



Panels & Assemblies, Chassis & Structural Parts, Fuel Tanks, Cross Car Beams. (Stamped parts made from sheet metal) Light Vehicles, Commercial Vehicles M&M (incl. EVs), Tata Motors (incl. EVs), Ashok Leyland 13,190



Differential Housings, Turbine Housings, Crankshafts Light Vehicles, Commercial Vehicles, Tractors, Construction Equipment & Earthmoving M&M, Hyundai, JCB, Ford, Automotive Axle, Cummins, Dana, John Deere 6,340

Magnetic Products


Soft and Hard Magnets Light Vehicles, Two Wheelers (Tier 1 largely) Denso, Sumida, Varroc, Intica, Mitsuba, Sona Comstar 1,599



Composite Compounds, Three Wheeler Structural Parts Electrical Switchgear, Light Vehicles, Three Wheelers L&T Switchgear, Legrand, ABB, Schneider, Siemens, GE Healthcare, M&M (Three Wheeler EVs), Hyundai 2,082

IMFs chief economist, Pierre-Olivier Gourinchas writes in his January-2024 blog post, "The clouds are beginning to part. The global economy begins the final descent toward a soft landing, with inflation declining steadily and growth holding up. But the pace of expansion remains slow, and turbulence may lie ahead." This is a succinct summary of the global economy. While things seem to be looking up from period of gloom, uncertainties like geopolitical tension & wars continue to cloud the horizon. IMFs latest outlook suggests that global growth is projected at 3.1% in 2024, same as in 2023 and 3.2% in 2025, with the 2024 forecast 0.2% higher than that in the October 2023 report. The forecast for 2024-25 is, however, below the historical (2000-19) average of 3.8 percent. Elevated central bank policy rates to fight inflation and a withdrawal of fiscal support amid high debt are weighing on the economic activity. Overall inflation continues its downward trend. Core inflation may persist as commodity and supply disruptions could occur, following renewed geopolitical tensions.

With 2024 going to be the global election year, making any economic forecasts is not an easy exercise. Globally, more voters than ever in history with at least 64 countries (plus the EU) - representing a combined population of nearly half of the people in the world - are meant to hold national elections, the results of which, could prove consequential. Of all the elections, the one in United States will be most watched given the outsized influence it exercises in the world. India also goes to the polls in April-May 2024 which will be watched keenly across the globe.

As per IMF the growth in the euro area is projected to recover from its low rate of an estimated 0.5% in 2023, which reflected relatively high exposure to the war in Ukraine, to 0.9% in 2024 and 1.7% in 2025. Stronger household consumption as the effects of the shock to energy prices subside and the inflation falls, supporting real income growth, is expected to drive the recovery.

India has been a bright spot in the gloomy global firmament for the last few years growing by 7.2% in 2022, 6.7% in 2023 and expected to grow by 6.5% in the next couple of years. The trajectory shows a slight weakening as the post pandemic pent up demand peters out. The India growth story is likely to sustain and even at 6.5%, India will be a standout economy.



Gears & Shafts, E-Drive Components, Flanges & End Yokes, Clutch Hubs Light Vehicles, Tractors, Construction & Earthmoving Equipment M&M (incl. EVs), Eaton, Caterpillar, American Axles, CNH, Dana 3,606


Gears & Shafts, Sleeves & Hubs, Welded Components Tractors, Construction & Earthmoving Equipment, Light Vehicles (EVs) Caterpillar, CNH, Meritor, General Dynamics, Allison Transmission (EV), Axle Tech (EV) 6351


The last few years have seen a focus on infrastructure building in India in sectors like Railways, Roads, Defence & Energy. The growth was focused on few key sectors as the private sector lagged on capex. It is starting to invest again on a significant scale as the state of corporate & banking balance sheets are in good health. The PLI schemes in various sectors are expected to provide a flip to this trend.

Some caveats are in order when we consider the India story. Given the tensions in West Asia, oil prices need to be watched. The India story at an oil price of $80-85/ bbl is remarkably different from at >$100/ bbl. As the Chinese economy recovers to pre pandemic levels, commodity prices could increase. Inflation remains a concern and the Reserve Bank is cautious on rate cuts but given the steady levels of fiscal deficit, the softening trend in interest rates should continue. Importantly Indias forex reserves remain at US$600bn+ levels and can cushion the economy against the kind of external shocks that affected many emerging countries in the last couple of years. The key concern is the fear of a K shaped economic recovery with consumption growth in lower income categories lagging others. The improvement in rural incomes seen in CY23 augurs well on this count. Last but not the least, it is expected that the general elections to be held this year in India will not impact continuity in economic policy.


The two key geographies that we operate in are India (~63% of consolidated sales) and Europe (~37% of consolidated sales). Please note that we have a small unit in Mexico which is covered under India sales (INR 2.69 bn).


In India, we supply to a variety of segments with the segment wise dependence of our India sales shown in bracket - light vehicles (52%), two & three wheelers (21%), tractors (18%) and trucks (9%). Different segments of the Indian automotive market behaved differently. Carrying on from the momentum of growth from last year, light vehicles have seen good growth this year as well over an already high base. Two wheelers remained sluggish as rural incomes are slowly recovering from the pandemic. Tractors overall remained flattish albeit on a higher base. Trucks saw strong growth especially in the second half on

the back of strong infrastructure spends and overall state of the economy. On the demand side the light vehicles and two-wheeler markets are expected to grow while the trucks and tractor segments may remain subdued.

Light Vehicles

The Indian light vehicles market has grown handsomely by ~23% over CY22. The market which has seen a slew of new launches has been buoyant due to the demand for all new models being strong. Softening RM prices may also help reduce the cost of acquisition, spurring demand.

Light Vehicles (Production Million Units)


2023 2022 Change

Full Year

5.44 5.11 6.4%


1.29 1.23 4.7%


1.46 1.38 5.3%


1.31 1.24 5.4%


1.39 1.26 10.2%

Source: IHS

Most agencies have estimated positive forecasts for the Indian passenger vehicle market with IHS in its latest update forecasting the Indian light vehicle to grow by 3.5% in CY24. Increased focus on mid SUV segment, timely facelifts of existing models, and the availability of a wide range of variants across the price spectrum, along with higher finance penetration, have enabled positive demand sentiment in the light vehicle segment. The long-term picture for the car market remains healthy, given the current low ownership levels and as per capita income continues to grow, it will increase the Indian households ability to afford a car. IHS global, expects the Indian light vehicles (less than 6T) to grow at a CAGR of 4.8% over a period of 2023-28 which will mean new highs every year for annual production. Crisil expects the longterm growth to be even higher.

Battery Electric Vehicles (EVs) were still less than 1% of overall market in CY 23 and are expected to increase to 4-5% by CY25. Crisil also expects EV penetration to increase in the next few quarters, supported by increase in charging stations, lower cost of acquisition and newer model launches from OEMs.

Two Wheelers

The two-wheeler industry production has shown a growth of 3.7% in CY23 as compared to the previous year (source: SIAM). The quarter-wise performance reveals that there was a decline in the demand for 2-wheelers in Q1C23 due to the higher cost of acquisition still playing on the minds of consumers. The year however has ended on a positive note due to the 19% growth seen in Q4C23 driven by healthy growth in the festive season.

Two Wheelers (Production Units)


2023 2022 Change

Full Year

20,312,955 19,593,268 3.7%


5,481,195 4,604,959 19.0%


5,563,997 5,650,264 -1.5%


4,898,422 4,834,465 1.3%


4,369,321 4,503,580 -3.0%

Source: SIAM

Volumes are expected to be driven by recovery in scooter sales as income sentiments improve and EV penetration increases. Normal monsoon prediction is expected to support demand for motorcycles segment positively. Exports which are roughly 16% of total production may remain subdued due to the global geopolitical scenario. However, Crisil forecasts a healthy CAGR of 8-10% between FY23-28 for domestic two-wheeler sales. A point to be noted is that the major part of this growth will come from EV sales, the traditional petrol vehicles are forecasted to grow at 2-4%. EV penetration has started to increase in this segment and is expected to jump to 10% by CY25 from the current 5-6%, as customer acceptability of these vehicles is rapidly increasing.


Tractor production in India has shown a slight decline of ~2% in CY23 (source: Tractor Manufacturers Association/ TMA). However, CY21 and CY22 were very good years for tractors when, for the first time, production crossed 1mn units in consecutive years. This trend continued in CY23 with production of almost 1mn units.

Tractors (Production Units)


2023 2022 Change

Full Year

985,968 1,007,976 -2.2%


195,466 224,671 -13.0%


274,009 304,864 -10.1%


259,038 287,320 -9.8%


257,455 191,121 34.7%

Source: TMA

Domestic tractor sales were affected YoY on account of erratic monsoon (6% below normal south-west monsoon). The trend of erratic monsoon has been seen for the last couple of years. Lower reservoir levels and anticipated decline in rabi acreage are expected to contribute towards a decline in tractor sales. Another key reason was the fading out of the pent-up replacement demand after the pandemic. This may moderate the growth in the next couple of years.

On the other hand, the level of farm mechanization in India is still sub optimal and there is large scope

Source: IHS Global

The first quarter in this year saw higher activity on the demand side and therefore was a very good quarter as compared to the previous year. The pent-up demand

for growth. CRISIL projects domestic tractor sales to expand at 3-5% compound annual growth rate (CAGR) between FY23-28. Tractor sales are cyclical and we may need to factor in a few years of erratic monsoon during the period.

Medium & Heavy Commercial Vehicles (MHCV)

MHCV production in India which had seen a large drop in CY19 pre pandemic was further hit by a steep drop of in CY20. CY21 saw a sharp recovery from this low base and it was expected to continue in the next couple of years. This expected growth has not materialized in spite of the demand being supported by increased government spending, robust replacement demand, and strong end-user sectors such as construction and mining. The growth did not materialize likely due to the improvement in efficiencies in the logistics sector as well as increased competition from other sectors like railways.

MHCV (Production Units)


2023 2022 Change

Full Year

386,297 385,936 0.1%


84,845 86,164 -1.5%


96,706 92,115 5.0%


91,442 96,026 -4.8%


113,304 111,632 1.5%

Source: IHS

IHS has forecast that in CY24 MHCV production in India would grow by 2%. For the longer term, IHS estimates this to grow at a conservative rate of 5.1% CAGR over CY23- 28. Crisil again is similarly forecasting a CAGR of 2-6%.


In Europe our operations cater largely to the light vehicle market, with a small portion of the revenue being supplied to the off-highway, farm equipment and tractors market.

Light Vehicles

Light Vehicles (Production Million Units)


2023 2022 Change

Full Year

17.31 15.37 12.6%


4.48 4.18 7.3%


3.77 3.52 7.1%


4.51 3.85 17.2%


4.54 3.82 18.8%

which was causing the uptick petered out by the fourth quarter.

For light vehicles (<3.5T incl. cars, utility vehicles & light commercial vehicles), the data from IHS shows that the production in Europe has grown by a strong 12.6% in CY23 v/s CY22 to 17.3mn units. In the second half of CY23, the demand came back down to mid-single digit growths. As pent-up demand stabilizes, light vehicles segment is estimated by IHS to degrow slightly by -3% in CY24. Also, as per IHS data the passenger vehicle market in Europe is forecasted to stay flat over the period of 202328. However, the pre pandemic market of 19-22mn units is not expected to be reached in the coming years with IHS forecasting production to be in the range of 16-17mn units for the next few years.

Electrification of powertrains has seen rapid adoption in Europe with share of battery electric vehicles (EVs) in the light vehicles segment reaching 15% in CY23 and expected to reach 40%+ by 2028.


The 2020s started with a once in a century pandemic that led to lockdowns, social distancing and new ways of communication emerging. The uncertainty has continued with two major wars in Ukraine and Gaza and more geopolitical uncertainties loom on the horizon. Climate change is a major cause of concern globally as the world seeks to develop a consensus on how to combat it. There has been a welcome increase in income levels in some of the most populous parts of the globe viz. China, India & Africa but this is accompanied by a greying of the population and the question is whether these regions will get rich before they get old. Technology is changing at a pace that is hard to keep up - automation, digitization, artificial intelligence etc. are reshaping businesses completely. These trends also require huge investments to be made by firms and governments alike, leading to long term cost inflation and the consequent pressure on individual incomes & ability to buy, as well as business margins.

The automotive industry is also affected by the above trends. Electrification of power trains is currently considered one of most important responses to climate change. Even on existing internal combustion engines, pollution norms are tightening at an extremely rapid pace. Car buyers are looking for more premium features like connected cars, space and driver assistance and not just power and pick up. Safety, comfort & lightweighting standards are advancing rapidly. Digitisation and Industry 4.0 are transforming the supply chain.


The global automotive industry is transforming rapidly on many dimensions as referred in an earlier section. Not only does a companys product-market strategy has to take these changes on board, there has to be an active risk management mechanism to manage the uncertainties surrounding these changes.

As pollution and climate change take centre stage, the light vehicles with internal combustion engines are proposed to be substituted by vehicles powered by alternative energy sources. Electric Vehicles (EVs) are currently seen as the most likely substitute. But the pace of transition to EVs varies widely across regions and segments. We have developed a comprehensive strategy for EVs that we will discuss in a later section.

Companies are increasingly expected to mind their carbon footprints and thus there is a push for localisation - parts being sourced from the same region rather than from far off, local for local. Near-shoring also helps minimise some of the supply chain bottlenecks that have bedevilled the automotive industry in the last few years. On the other hand, as developed nations seek to meet stringent CO2 reduction targets, some polluting processes like steel and aluminium castings are migrating to emerging ones. We think both these issues could lead to more opportunities for our Indian operations.

Lightweighting and safety are two other key themes in the automotive industry. The former will lead to a push towards materials like aluminium forgings & castings and composites, all three of which are focus areas for us. The transition to EVs, lightweighting and safety all require components with higher precision, closer tolerances and better quality. Our strategy is to upgrade our processes and productivity levels to best in class. In recent years, we have upgraded most of our plants in India and some of the improvements are highlighted in the section on operations.

Our approach has been to attain an optimal balance across growth, investments and returns. We aim to organically grow higher than the market growth rates, weighted as per our presence in different segments, in both our key geographies: 5%+ higher than the market in India and in step or marginally higher than the market in Europe. Your company pursues a judicious mix of organic and inorganic growth. Mergers & acquisitions are targeted to fill strategic gaps in our products, customers, or skills portfolio. We aim to achieve a consolidated EBITDA margin on sales and a consolidated RONA (Return on Net Assets) aligned with our parent company.

In accordance, our company consistently pursues the following principles that we believe sets us apart from the competition: make operations world class; diversify customer base, plant locations & technologies; invest in a disciplined manner; focus on continuous improvement in profitability and decentralize plant management.

The focus on diversification is key to our aspirations. In India, we are present in 7 technologies, 4 market segments and more than 50 customers out of which 20+ are those with annual sales of more than INR 500mn. In Europe, we have a well-diversified customer base covering some of the key OEMs and tier 1 players in the light vehicles and off-road segments. This level of diversification not only enables us to manage the volatility in sales at some of our anchor customers but the portfolio approach helps us in protecting our margins.

Another important element is our disciplined approach to capital expenditure encapsulated in a few key guidelines. Investments are key to growth but at the same time we are careful not to overextend ourselves. Thus, as a rule we aim to spend 5-6% of sales as CAPEX every year. This includes both maintenance and growth CAPEX with the latter forming roughly two thirds or more of overall CAPEX. We accept those CAPEX projects that are designed to achieve the defined RONA (Return on Net Assets), exceptions being very rare. Projects where we have greater visibility and stability in terms of future order projections are prioritized. Our endeavour is also to make sure that we use general purpose machinery so that in the case of the project not meeting assumptions, these machines could be repurposed for other projects.

The cornerstone of our strategy is the focus on improving operations. The aim is to make our plants, especially those in India, comparable to the best in class globally. The key is to improve productivity levels at our Indian plants and we are focused on improving value added per employee at every plant. This is being done through a variety of projects - optimising plant layouts, automating machines and especially material handling, improving cycle times, eliminating unnecessary operations & manning and digitizing data capture so that quality and other issues can be detected at an early stage. Teams from the parent CIE Automotive provide all help in terms of know-how transfer in these projects.

The success of our strategy can be gauged by the consistent improvement in performance over the years. Our EBITDA margins, PAT, free cash flows and return ratios are quite close to CIE Automotive global benchmarks and among the best few among component companies in India.


Electrification of powertrains has seen rapid adoption in Europe with share of battery electric vehicles (BEVs) in the light vehicles segment reaching 15% in CY23 and expected to reach 40%+ by CY28. However, it seems that electrification process both in US and Europe is slowing down and a delay of 2 to 3 years from previous forecasts can be expected. In India, the transition to electric mobility is expected to be more gradual especially in 4W though certain segments like 3W and 2W may see rapid adoption of EVs. Our forgings business both in India & Europe, is a market leader in key internal combustion engine parts like crankshafts and will be affected negatively when EVs become mainstream. As the exposure to such parts in Europe is higher and the pace of transition to EVs more rapid, the risk to sales for our European business is significant. In India, given the slow introduction of 4W EVs, our lower exposure on engine parts and a good order book for EV parts, we see the risks of EV transition in India being minimal.

Our mitigation plan in Europe is to substitute production of crankshafts by Aluminium forged parts and increase steel parts that will not be affected by transition to electric vehicles. We have got interesting new orders

on those, and some of them are already in production on our plants. In addition, the Gears plant in Europe is developing a healthy order book in electric vehicle transmission parts. Our EV order book in India is spread across aluminium & steel castings, steel forgings, gears, stampings, and composite parts for e2W, e3W and e4W segments. We want to be actively quoting on all new EV opportunities. CIE Automotive & CIE India have close contact & interaction with almost all EV producers in Europe, USA and India, in at least one of our verticals. We have identified the key products on EV on each of the technologies and we are actively pursuing them on the market on all and every customer involved on EV. These products are largely under four categories: shafts & gears for EV transmission; housings for motors & electronics; structural parts for batteries like trays and parts for the cooling & auxiliary systems of batteries. A snapshot of these EV parts is shown in the early pages of the annual report.

Our diversified technology, product and customer portfolio allows us to address the requirements and risks emerging from EV transition in an effective manner. As the supplier ecosystem of EVs is at a nascent stage, EV OEMs are looking to partner with suppliers who have quality and pedigree. Therefore, as a high-quality supplier of automotive parts, we consider the transition to EVs to be more of an opportunity than a risk.



Automotive market growth in India in CY23 was uneven across segments, quarters and customers. Light vehicles grew reasonably but two wheelers and tractors were subdued. The first quarter was good followed by a muted second quarter but the festive season was encouraging. The performance of our key customers was also mixed with some suffering negative or flat demand growth. We had reported last year that all the business verticals were expanding capacity - at gears vertical for EV parts; at Bill Forge, Bengaluru for EV transmission parts, at CIE Hosur for fuel rails and other parts, at Chatrapati Sambhaji Nagar for 4W Aluminium EV parts, among others. There was delay in ramp up of some of these orders, especially at CIE Hosur and Aluminium vertical, and this impacted our sales growth.

To safeguard margins and returns, the Company is focusing on increasing labour productivity through smart automation and on improving asset utilisation by optimising working capital, enhancing machine throughput and focusing on flexible machines. To keep expanding the order book, emphasis is being laid on improving new product development and the skills required for it. Developing parts with greater value addition remains an important part of operational strategy. At the Composites vertical, components, especially 3W Electric Vehicle (EV) parts, comprise more than 50% of sales vis-a-vis compounds. Stampings

vertical has developed welded and assembled parts and installed robotic welding processes. The gears team has developed processes for robotic cell configuration with innovative solutions for teeth chamfering. They have automated the deburring process which is very innovative as the process does not follow set patterns. At iron castings, we have implemented robotized fettling and machining for differential cases. The organization at the Aluminium vertical is being completely revamped and the layouts and process flows at the plants are being upgraded.

Looking ahead, the demand situation in the Indian automotive market continues to be optimistic. The Indian economy is expected to be a $5 trillion economy (from the current $3.3 trill.) by 2026-27. Car ownership in India is about 28 per thousand which is about 20 times lower than in Europe & US and much lower than even in China. The expansion of the economy will see improvement in this ratio. Two wheelers are more of a necessity and almost half of all households in India own one. There is enough scope to increase penetration especially in rural areas, which are the focus of most 2W OEMs. The pace of infrastructure building which accelerated as the government primed the economy during the covid pandemic, is expected to help both the tractors and truck segments. Your company is well prepared to capitalize on these prospects. We aim to balance order book requirements and investments in capacity such that both growth and profitability objectives are met.

India is one of the priority global markets identified by our parent CIE Automotive and the Indian operations will continue to be a focus area. In CY 23, our Indian operations grew by 5% and generated an EBITDA margin of 16.7%.


The light vehicle market in Europe grew in double digits in CY23 driven by pent up demand but demand for off road vehicles in the US market declined. The ongoing war in Ukraine and the tense situation in Israel continues to cast a shadow on European customer outlook. Power costs in Europe stabilised and this helped in recovering margins to levels seen before the energy crisis that was triggered in the last quarter of CY21. But pressure on costs continues to be a concern. Our endeavour is to maintain margins and focus on cash generation in Europe. We are developing aluminium forgings as an alternative to crankshafts. In addition, the Company has a healthy order book on steel forgings and transmission parts specific to electric vehicles.

The European light vehicles production was in the range of 19-22mn units every year between CY2010-19. IHS expects the demand five years ahead forecasted to be in the range of 16-17mn units. The stagnation in demand is accompanied by a penetration of EVs but not at the rapid pace that was forecasted earlier. Also, inflation in electricity prices and other costs is expected to linger. In

Europe the company will aim to reengineer products and processes to meet the twin challenges of rising costs in a stagnating market as well as a transition to EVs.

In CY23, our European operations grew by 10% and generated an EBITDA margin of 17.8%. While the market forecasts in Europe are muted, we are quite optimistic of our European business which has high margins, returns and cash generation.


The financial performance of the entity for the year ended 31st December 2023 and 31st December 2022 is presented below:

CIE Indias abridged P&L Statement for the Financial Year 2023

( in Millions)

Sr. No. Particulars



Year Ended

Year Ended

December 23 December 22 December 23 December 22
Audited Audited Audited Audited

1 Income from operation

(a) Revenue from operations

45,698.43 43,978.23 92,803.49 87,530.37

(b) Other Income

1,504.09 1,206.34 820.10 582.88

Total Income

47,202.52 45,184.57 93,623.59 88,113.25

2 Expenses

(a) Cost of material consumed

24,171.73 24,711.03 48,533.60 48,606.53

(b) Change of inventories of finished goods and work-in progress

86.94 (258.55) 574.69 (846.62)

(c) Employee benefit expenses

4,278.21 3,966.02 9,944.15 9,022.07

(d) Finance cost

109.83 134.57 1,073.68 227.12

(e) Depreciation and amortization expenses

1,357.19 1,332.05 3,221.96 2,962.23

(f) Other Expenses

10,033.37 9,343.87 19,512.15 19,028.31

Total expenses

40,037.27 39,228.99 82,860.23 78,999.64

3 Profit/(loss) from operation share of profits of associates, exceptional items and taxes (1 - 2)

7,165.25 5,955.58 10,763.36 9,113.61

4 Share of profit / (loss) of associates

- - (4.85) 22.00

5 Profit/(Loss) from ordinary activities before exceptional items

7,165.25 5,955.58 10,758.51 9,135.61

6 Exceptional items

- 378.73 - 378.73

7 Profit/(Loss) from ordinary activities before tax (7-8+9)

7,165.25 6,334.31 10,758.51 9,514.34

8 Current Tax

1,502.58 1,290.85 2,741.89 2,190.15

Deferred Tax (Credit) / Charge

39.23 (77.44) 40.32 210.71

9 Net Profit/(Loss) for the period from continuing operations

5,623.44 5,120.90 7,976.30 7,113.48

10 Discontinued operations

Profit/ (Loss) before exceptional items from discontinued operations

- - 5,340.53 830.83

Loss on fair valuation of assets and liabilities of Discontinued operations

- - (1,536.45) (9,233.70)


Sr. No. Particulars



Year Ended

Year Ended

December 23 December 22 December 23 December 22
Audited Audited Audited Audited

Profit/ (Loss) before tax from discontinued operations

- - 3,804.08 (8,402.87)

Current tax

- - 257.29 92.14

Deferred tax expense/ (reversal)

- - 271.60 (19.87)

Tax expense on discontinued operations

- - 528.89 72.27

11 Profit/ (Loss) from discontinued operations (after tax)

- - 3,275.19 (8,475.14)

Net Profit/(Loss) after taxes

5,623.44 5,120.90 11,251.49 (1,361.66)

12 Paid - Up equity share capital (Face value of 10 per equity share)

3,793.62 3,793.18 3,793.62 3,793.18

13 Earnings per share (after extraordinary items) (of 10/- each)

(a) Basic

14.82 13.50 29.66 (3.59)

(b) Diluted

14.82 13.50 29.66 (3.59)

Information for our Indian and Overseas operations are summarized in the table below:

Segment wise results for 2023 ( in Millions)

Year ended

Sr. No. Particulars

31st December 2023 31st December 2022
Audited Audited

Segment Revenue

a) India

59,459.08 56,325.95

b) Europe

44,570.80 51,343.11

1 Total

104,029.88 107,669.06

Less: Inter Segment Revenue

(473.98) (448.42)

Net Sales / Income from Operations

103,555.90 107,220.64

Less; from discontinued operations

(10,752.41) (19,690.27)

Net/Sales income from continuing operations

92,803.49 87,530.37

Segment Profit/(Loss) before tax and interest from

a) India

7,087.84 6,349.29

b) Europe

10,161.74 4,449.88


17,249.68 10,799.17

Less: from discontinued operations

(5,417.49) (1,057.72)

2 Profit / (loss) before tax and interest from Continuing operations

11,832.19 9,741.45


(i) Un-allocable expenditure

1073.68 227.11

(ii) Un-allocable income

Total Profit Before Tax

10,758.51 9514.34


Year ended

Sr. No. Particulars

31st December 2023 31st December 2022
Audited Audited

Capital Employed

(Segment Assets - Segment Liabilities)

3 a) India

63,260.23 59,477.73

b) Europe

34,358.91 39,804.82


97,619.14 99,282.55

4 Segment Liabilities

a) India

21,669.00 21,895.21

b) Europe

16,070.73 26,402.49


37,739.73 48,297.70

The Key Financial Ratios of the company are given as below:

Debtors and Inventory Turnover:

Debtors and inventory, number of days, have come down both in Standalone and Consolidated results, with the easing in commodity prices, improvement in operations and increased customer discounting/non-recourse factoring.

Interest Coverage Ratio:

Standalone reduction in debt and improved profits has further improved the interest coverage.

Consolidated coverage ratio, while being healthy, has fallen due to interest rate increase in Europe.

Current Ratio:

Cash generation in Standalone has improved this ratio significantly.

Debt Equity Ratio:

Both standalone and in consolidated the ratio has improved due to debt reduction and profits earned during the year.




CY-23 CY-22 CY-23 CY-22

(i) Debtors Turnover (Days)

39 49 27 37

(ii) Inventory Turnover (Days)

44 49 54 58

(iii) Interest Coverage Ratio (times)

66 48 11 41

(iv) Current Ratio (times)

2.2 1.7 1.0 1.0

(v) Debt Equity Ratio (times)

0.01 0.03 0.13 0.18

(vi) Operating Profit Margin (%)

20.3% 19.2% 17% 15.4%

(vii) Net Profit Margin (%)

13.2% 12.6% 9.1% 8.6%

(viii) Return on net worth (%)

11.4% 11.5% 18.8% -2.7%

Operating and Net Profit Margin:

Operating margin in Standalone continued to get better with efficiency improvement and increase in other income. Consolidated margins improved as energy prices got stabilized in Europe. Indian margins improved with efficiency improvement and increased value added products across divisions.

Return on Net Worth (RONW):

Consolidated RONW was impacted in 2022 due to onetime write off on fair valuation of German assets. In 2023, RONW from continued operations is 13.3% in line with 2022 excluding exceptional item.


Our plants operate under strenuous working conditions. Processes like forgings, castings, stampings, machining etc. require a disciplined working approach and mistakes can harm the well-being of our workers. The company places as much emphasis on safety as it does on growth and profitability. Prioritizing health and safety in the workplace is not only essential for the well-

being of employees and workers but also contributes to overall operational efficiency. The goal is to achieve zero incidents.

In CY23 with an intent to work towards "Back to Basics" we have launched 12 Life Saving Rules project to provide training to employees on these critical safety rules which they need to follow during their daily activities at plants. We continued to upgrade and introduce safety infrastructure to improve overall motivation of employees and develop a safety culture. During CY23, apart from the internal health and safety audits of our plants, external audits on Fire Load Calculation, Chemical Safety, Electrical Safety, HAZOP Study & HAZID were conducted. Most of our plants have successfully certified for ISO 45001 and ISO 14001 standards.

The focus on extensive training, infrastructure development, constant communication, regular reward and recognition and involvement of shop floor employees has contributed to the overall safety performance improvement.


As an organization, our company is evolving with its HR practices and policies to improve on employee engagement and experience. We strive to provide a good working environment to our employees such they have ample opportunities to further their skills. A key focus is to maintain harmonious relations with employees at all plants in all geographies. The organization has put in place a Diversity, Equity and Inclusion framework and has adopted appropriate targets in line with the practices of CIE Automotive globally. Our Employee Value Proposition (EVP) is centred on four pillars of Care & Wellness, Advancement opportunities for Career Growth, Respect & Dignity and Structured Reward and Recognition.


In accordance with our EVP, we have rolled out career development programs for employees through Individual Development Action Plans (IDAPs). Coaching has been introduced in the organization; senior managers have been trained as coaches who in turn coach the employees on their IDAPs. 389 employees have designed their career aspirations through IDAPS and 35 managers have been trained as coaches. The process for succession planning has been designed, implemented and rolled out across the organization. We are continually focusing on building a strong young talent pipeline of engineers and have specially crafted yearly learning plans for young engineers hired as freshers from campuses. We have inducted 47 Graduate trainee Engineers in the current year.

The organization has in place a Diversity, Equity and Inclusion framework and has adopted targets for Gender, Generation, Functional and Multicultural Diversity. The company has introduced Diversity Awareness and Sensitization programs for its managers.

To drive the culture of recognition driving performance there is a strong focus on the Recognition practices through its Panchratna award scheme. Further to drive performance culture, the company has redesigned its Leadership Competency Model which is incorporated in the Performance Management Systems. The organization is evolving with its HR practices and policies to improve on employee engagement and experience. Further it has rolled out a comprehensive HR Scorecard which measures the HR Performance across all plants covering all the HR processes and initiatives.

A portion of our permanent labour workforce in certain locations is part of labour unions. We have signed collective bargaining and other agreements with labour unions at several plants where we have agreed to certain guaranteed bonuses, guaranteed wage increases, and wages linked to productivity. A detailed breakup of the composition of the workforce in India is provided in the BRSR report.


As on 31st December 2023, there were 772 employees on the rolls of our Spanish & Lithuanian plants (comprising CIE Galfor S.A., CIE Legazpi S.A. and CIE LT Forge) and 208 at our Italian plant.


It may be a cliche but it is true that every company today is a digital company whatever its line of business. IT is not just a support function, but a business enabler. In line with this philosophy, our digitalisation and IT strategy focuses on three pillars. Having world class digital infrastructure is key to building a robust IT strategy. Digitalisation is a tool to improve productivity by automating processes which are repetitive and boring. Industry 4.0 initiatives can create more innovative ways of manufacturing.

Your company has migrated to "Cloud Infrastructure" and is in the process of adopting "Hyperconverged Technology". The use of virtual data base through these applications ensures that data is protected at multiple virtual locations while having real time access. In the next couple of years, the company will upgrade to SAP S4HANA.

Many processes have been automated especially in processes like sales, purchases, production, inventory/ stores, assets, payroll etc. In CY 23, vendor modification, capex approval, overtime logs, scrap management were digitized among others. Automating such processes is also helping us move towards paperless offices that is an important part of our green initiative. Robotic Process Automation (RPA) has accelerated with more monotonous processes being automated and utilisation of BOTs is becoming more sophisticated.

As part of implementing industry 4.0 ideas on the shopfloor your company is implementing internet-of- things (iot) applications at its plants. The key objective is to measure and capture machine efficiency parameters

on a real time basis. In CY22, we had taken up shop floor automation at the gears division in India while in CY 23, the same was implemented at CIE Hosur. These projects involve a few key steps - master data preparation, networking, connecting machines to the network (LAN), configuring the machine controllers (PLCs), installing human machine interface (HMI) and verifying the data captured. At CIE Hosur, we achieved a count verification of 100% accuracy on machining equipment and of 96% on the forging presses.


ESG has become an imperative aspect of business and investors are paying attention to this along with financial performance of the company. The company understands that a wholistic approach to ESG is important to have harmonious relations with all stakeholders in our business - shareholders, employees, customers, suppliers, community, which is key to long term stability of our business model.

Being a subsidiary of CIE Automotive, we are bound by the 5 years Strategic ESG plan to comply with 79 KPIs designed under 4 pillars namely, CIE Culture, Ethical Commitment, Eco Efficiency and Active Listening; which are aligned with the UN- 17 Sustainable Development Goals. In order to identify the most important issues for the company, a materiality assessment is conducted followed by prioritizing material issues and defining the key ESG KPIs and initiatives. These prioritized targets become part of business process/Balanced Score Cards of all divisions wherein. A review system is put in place to ensure that these initiatives are driven at highest level in the organisation and progress on the same is tracked on monthly basis.

Some of the key achievements of CY23 are listed as follows: 57% of energy consumed in the Indian plants came from renewable sources, 178% of waste was sent to landfill and 5642 trees were planted across locations in India. A snapshot of images of our ESG projects is shown in the early pages of the annual report.

Among the material issues identified, we would like to highlight a few. Your company is focusing on a robust and responsible supply chain, complying with global ESG standards as articulated by our partners viz. customers, suppliers, rating agencies etc. The key to achieving this is emphasizing local sourcing and environmental assessments. Under the head of circular economy, the company aims to reduce raw material consumption, manage waste efficiently, and implement measures to improve energy efficiency across the value chain. CIE India is committed to achieving carbon neutrality by 2050, adopting ISO 14001 & ISO150001 standards, and implementing measures for renewable energy use, material circularity, and responsible resource utilization.


Under Indian regulations, a company has to mandatorily set aside a small part of the profits for social projects.

While this may be a regulatory requirement, we views it as an opportunity to improve the lives of the communities among whom we operate. We have multiple plants in India and many of these are located in semi urban and rural areas and our CSR projects are a small effort to help the communities living around our plants.

Our CSR projects focus primarily on three areas: Promoting Education & Skill Building; Improving Health & Sanitation and contributing to Environmental Sustainability & Rural Development. Under these principles: Bill Forge has built a modern school in suburban Bengaluru. At Pune, the company supports the CIE Skills Institute which trains students who have completed Standard 10th in different manufacturing trades like welding, fitting etc. for the last few years. A total of 895 trainees including 118 women trainees have enrolled over the years. 30 batches with 779 trainees have completed their courses with 83% placed in local factories. In the current session, the institute is running a course on driver training for LGBTQIA+ community. A similar training program for special children is being run in Pune. We also support an NGO in Pune which works towards the rehabilitation of drug addicted individuals. At Rajkot & Chatrapati Sambhaji Nagar, the company is implementing programs for Zila Parishad schools like a sanitation awareness programs called the WASH program and upgrading the infrastructure of these schools under the Every Class Smart Class program. Projects on rural welfare and tree plantations are also continuing. A snapshot of images of our CSR projects is shown in the early pages of the annual report.

We engage with competent delivery partners to implement these CSR projects. Each project is assessed to evaluate if it has made the desired impact on the target audience. The CSR plan and performance is monitored by the CSR committee of the board every quarter.


The business has a specific set of risk characteristics which are managed through an internal risk management practice. The first line of defence in the risk practice are the operational management who are tasked with identifying risks and reporting breaches that can put the company to risk. The second line are processes and policies that are assessed periodically by the board and its audit & risk management committees. Key processes and policies include internal controls, data security & privacy, statutory compliances and ethical framework (code of conduct & whistleblower policies). Internal audit is the third line of defence that continuously reviews the efficacy of the first two lines. The senior management periodically reviews the risk management process and the actual management of risks identified. They report their findings every quarter to the risk management and audit committees of the board. The risk management committee reviews identification, assessment, management and monitoring of risks. The audit committee closely looks at the processes associated with risk management. Both these committees report to

the board which provides directions to strengthen the overall risk management practice.

The process to identify risks is also defined. Senior executives participate in the annual risk assessment survey carried out by CIE Automotive to identify key risks associated with the business in each of the key geographies that CIE operates in. This is supplemented by periodic internal assessment to identify risks under different categories - strategic & reputational, commercial, technological, operational, financial, people related, regulatory/compliance and ESG (Environmental, Social & Governance), etc. Risks under these categories are classified as short term and long term and monitored periodically.

Risks are prioritized based on the following criteria:

• Probability of occurrence - based on past experience and analysis of the future

• Impact along three dimensions - economic, organisational and/or reputational

• From the standpoint of residual risk: considering the controls already in place in order to mitigate the potential impact of their materialisation

Some of the key risks identified by CIE Automotive globally for CY2023 are as follows:

• Market trend change: The company is highly dependent on the performance of the automotive industry in India and Europe. Any adverse changes in the conditions affecting these markets may negatively affect business, results of operations, financial condition and prospects.

• Geopolitical situation: The geopolitical situation continues to be grim with the war in Ukraine continuing to rage and West Asia thrown into turmoil due to hostilities in Gaza which are casting a shadow on West Asia and North Africa. This has led to a destabilization of Red Sea shipping causing problems in the free movement of goods across the world. A consequence could be shortage and increasing prices of some commodities disrupting supply chains of automotive firms. These disruptions have become increasingly common in the last few years starting with covid and continuing with the shipping & semiconductor chip crises and leading to the war situation in Ukraine & Gaza. OEMs are increasingly adopting a local vs global approach i.e. a European OEM prefers to source from companies in its vicinity - from European companies or from companies in Turkey, Russia or North Africa vs companies in India or China. This approach could reduce the expected growth in export revenues.

• Green supply chain: ESG has become an imperative aspect of business and investors are paying attention to this along with financial performance of the company. We will continue to enhance our value chain partners ESG performance by identifying areas of opportunities through regular assessments/visits.

• Human capital for companys growth: As the automotive industry goes through the throes of change, volatility & uncertainty; the challenges thrown up can only be met by a team that is both skilled and motivated. The managements challenge is to upskill their team and fill any skill gaps and ensure that they are primed to face the vicissitudes in the business environment. Succession planning and talent management are key initiatives that are being implemented. The Individual development program (IDAP) is closely monitored. One key element of the program is close collaboration with CIE teams worldwide for continuing training and skill upgradation.

Along with the above, your company has identified

the following other risks that can affect its growth &


• The loss of certain principal customers or a significant reduction in purchase orders from certain customers could adversely affect business, results of operations, financial condition and prospects.

• The dependence on a few key customers in some business verticals is high and leaves these verticals reliant on the performance of these OEMs - the Stampings business in India and Gears business in Italy are two examples. Overall, both the Indian and European operations of the Company are now well diversified and customer concentration risk is pertinent to a few verticals as stated above.

• Potential inability to pass-through to its customers increase in costs like labour, energy, etc. could reduce future profitability.

• As part of its growth strategy, the company aims to develop many new parts for both existing and new customers. Managing the new product development process in an efficient manner is a key challenge.

• The company will need to be ready for changes in its product portfolio to counter the impact of transition in automotive technology to hybrids and electrical engines. Electrification will mean a greater emphasis on stamped, plastic and aluminium parts compared to forged, cast or machined parts. As the supplier ecosystem for EVs is at a nascent stage, EV OEMs are looking to partner with suppliers who have quality and pedigree. Therefore, the transition to EVs may be more of an opportunity rather than risk.

• Cybersecurity & data privacy: As digitization & automation increase in the business, there is a growing concern around data being breached by inimical third parties.

• Digitisation & Automation is a key focus area to improve operations. Not being able to implement these programs in a time bound manner can affect operations.

• Implementation of the new labour code as well any increase in minimum wages for workmen will increase costs.

To summarise, the risks to growth and capex efficiency are the key ones to monitor in India in CY24 while in Europe we need to watch the risks posed by EV transition and the lingering impact of inflation, especially the escalation in steel & energy prices.


In the opinion of the Management, CIE India has adequate internal audit and control systems to ensure that all transactions are authorized, recorded and reported correctly. The internal control systems comprise extensive internal and statutory audits. The Corporate Governance practices instituted by the Company are discussed in detail in the chapter on Corporate Governance of this Annual Report. Report on statutory compliances has also been provided.


The last two years have shown that we operate in a world which is unpredictable. The company has also shown that it is capable of meeting any challenge that is thrown its way. Operational efficiency and profitability are two sides of the same coin, and our focus is to keep on improving operations through process reengineering, automation, and digitization. The effort is to ensure that all our plants continue their journey to be world class. The CIE India team is confident that it can utilise future opportunities and face future challenges with agility in order to meet the shareholders expectation of sustainable growth and profitability.


Certain statements in the Management Discussion & Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ from those express or implied. Important factors that could make a difference to the Companys operations include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other incidental factors.