CIE Automotive India Faces Financial Challenges Amidst Modest Growth and Market Underperformance

CIE Automotive India, a midcap player in the Castings/Forgings industry, has recently undergone an evaluation adjustment that reflects its current market dynamics. The company reported a challenging financial performance for the third quarter of FY24-25, with net sales recorded at Rs 2,109.95 crore, marking a notable low for the period. Additionally, the operating profit stood at Rs 299.27 crore, contributing to a decline in the operating profit to net sales ratio, which was at 14.18%.
Over the past five years, CIE Automotive has experienced modest growth, with net sales increasing at an annual rate of 2.54% and operating profit at 9.37%. However, the stock has underperformed relative to the broader market, generating negative returns of -12.53% over the last year, while the BSE 500 index saw a slight gain of 0.06%.

Despite these challenges, the company maintains a low debt-to-equity ratio of 0.10 times and an attractive return on equity of 12.5%. Institutional holdings are also significant, with 25.23% of shares held by institutional investors, indicating a level of confidence in the company's fundamentals.

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