Buy Mahindra CIE Automotive, target price Rs 378: ICICI Securities

ICICI Securities has buy call on Mahindra CIE Automotive with a target price of Rs 378. The current market price of Mahindra CIE Automotive is Rs 310.45.

Mahindra CIE Automotive Ltd., incorporated in the year 1999, is a Mid Cap company (having a market cap of Rs 11842.25 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 30-09-2022, the company reported a Consolidated Total Income of Rs 2736.95 Crore, down -.22 % from last quarter Total Income of Rs 2742.86 Crore and up 30.45 % from last year same quarter Total Income of Rs 2098.09 Crore. Company reported net profit after tax of Rs 171.07 Crore in latest quarter.


Investment Rationale
The brokerage expects MACA to deliver mean FCF of ~Rs5.5bn each year in CY22E-CY23E. With RoE improving to ~15% by the end of CY23E (~8% in CY21), FCF yield at ~6% and lean balance sheet, it believes CMP of the stock is attractive. Maintain BUY with a DCF-based target price of Rs378/share (earlier: Rs345), implying ~14x CY23E EPS.

Promoter/FII Holdings
Promoters held 74.87 per cent stake in the company as of 30-Jun-2022, while FIIs owned 6.85 per cent, DIIs 8.11 per cent.