Shares of Mahindra CIE Automotive hit a 52-week high of Rs 333.90 as they rallied 6 per cent on the BSE in Friday’s intra-day trade despite overall market weakness. In the past two trading days, the stock of the auto components & equipments company has surged 16 per cent after the board reviewed future plans of the company’s German forging operations.
With today’s upmove, the stock has surpassed its previous high of Rs 327.90, touched on October 20, 2022. It was trading close to its record high of Rs 380, hit on January 8, 2008. At 01:54 PM, the stock was trading 5 per cent higher at Rs 330, as compared to 0.42 per cent decline in the S&P BSE Sensex. Average trading volumes on the counter jumped five-fold with a combined 3.3 million shares having changed hands on the NSE and BSE till the time of writing of this report.
“India is projected to be one of the fastest growing large economies in the world and CIE Automotive’s global strategy continues to focus on India as a key market. To reflect the this strategy, the board approved to change the name of the Company to CIE Automotive India. The board also noted the change in name of Company’s German Forging holding company i.e. Mahindra Forging Europe A.G. to CIE Forging Germany GmbH,” the company said.
On December 14, Mahindra CIE’s board reviewed the future plans of the Company’s German Forging Operations comprising CIE Forging Germany GmbH (CFG) and its subsidiaries and a proposal approved by the board of directors of CIE Galfor S.A. (Galfor), the immediate holding company of CFG.
The company’s German forging operations supply forging parts primarily for the European truck industry. Galfor, a wholly owned subsidiary of the Company, also supplies forging parts to the light vehicles industry from its own plant and other subsidiaries in Europe.
The company said the light vehicles industry in Europe is seeing a rapid transition to Electric Vehicles (EVs) and the company is focused on managing this transition. The company also wants to benefit from the growth opportunities emerging in the Indian automotive industry.
In line with this, the Board took note of the proposal approved by Galfor to launch an active program to locate a buyer for the German forging operations comprising of CIE Forging Germany GmbH and its subsidiaries.
Geojit Financial Services believes that despite demand push back for short term, MCIE’s key customers are outperforming the industry growth. “As a result, the current order remains strong for the company. Increased business with existing customers owing to supplier consolidation, localization and shifting the production to India, as primary hub for export is adding value for the company,” the brokerage firm said in September quarter result update.