/** Title: CIE India Q2 and H1 CY2026: Growth holds up, margins tested in India, Europe stabilises after restructuring */

CIE India Q2 and H1 CY2026: Growth holds up, margins tested in India, Europe stabilises after restructuring

CIE Automotive India Limited reported a steady set of Q2 CY2026 numbers, supported by double digit growth in India and a sharp margin recovery in Europe. Consolidated Q2 CY2026 sales came in at INR 2,543 crore, up from INR 2,291 crore a year ago. EBITDA rose to INR 418 crore and EBT to INR 312 crore, while EBITDA margin was 16.4%, broadly stable year on year.

The quarter’s narrative, however, was not only about reported growth. Management repeatedly highlighted the impact of cost inflation linked to the conflict in West Asia, and investors on the call focused heavily on why the company’s India growth did not consistently outperform the market. The company’s response was direct: portfolio pruning in aluminium, a second straight quarter of weak exports, and some customer mix issues held back growth.

Q2 CY2026: India grows, but margins soften

India operations posted Q2 CY2026 sales of INR 1,655 crore, up 13% year on year. EBITDA was INR 277 crore and EBITDA margin was 16.7% versus 17.5% in Q2 CY2025. EBIT margin also softened to 13.2%.

Management attributed the margin pressure to inflation in energy, consumables, and part of raw materials driven by West Asia geopolitical tensions. It also stated that countermeasures are being taken and should reflect over the next two quarters.

The broader Indian auto market in April to June 2026 remained supportive, with light vehicles up 16.2% year on year, two wheelers up 22.9%, tractors up 14.6%, and medium and heavy commercial vehicles up 6.3%.

Q2 CY2026: Europe shows margin recovery despite weak underlying volumes

Europe operations delivered Q2 CY2026 sales of INR 888 crore, up 7% year on year. But in euro terms, the company stated real sales growth was minus 6%, with exchange rates contributing a positive translation impact.

The key improvement was in profitability. Europe EBITDA margin improved to 15.9% from 12.5% a year ago, supported by the effect of last year’s restructuring activities. EBIT margin also improved to 11.6%.

Management clarified on the call that part of the Europe segment includes Mexico, and a major customer renegotiation there led to revenue decline in Mexico in the quarter. At the same time, it emphasised that Metalcastello performance had improved and was not the issue.

Financial summary

Note: Figures are from the investor presentation tables and are stated in INR million there; converted here to INR crore.

H1 CY2026: Consolidated performance remains solid

For H1 CY2026, consolidated sales rose 13% year on year to INR 5,084 crore. EBITDA increased 16% to INR 849 crore, and PAT increased 18% to INR 485 crore. EBITDA margin improved to 16.7% from 16.3%.

India delivered H1 sales of INR 3,274 crore, up 14%, while Europe delivered INR 1,810 crore, up 12% in INR terms. In euro terms, Europe sales were stated to be down 3% due to weak automotive market conditions.

Segment margins diverged. India EBITDA margin for H1 was 17.2%, down from 18.0%, again attributed to inflationary pressures. Europe EBITDA margin improved to 15.8% from 13.1% due to restructuring actions.

Cash flows and balance sheet: strong liquidity, volatile working capital

As of June 30, 2026, the company reported net financial debt of negative INR 1,416 crore, indicating a net cash position. It also disclosed return metrics of RONA at 19.4% and ROE at 12.5%.

Cash flow disclosures highlighted two realities. First, the business continues to generate strong operating cash flow relative to EBITDA in the internal cash flow bridge shared in the presentation, where operating cash flow was stated at INR 620 crore or 73% of EBITDA. Second, working capital swings were substantial, with working capital variation shown as negative INR 701 crore in the same bridge.

This working capital movement also appears in the statutory cash flow, where trade receivables increased sharply in H1 CY2026.

Strategy and execution focus: expansions, exports, and portfolio reset

Management’s commentary focused heavily on capacity expansion and execution pace. It stated that capex in H2 CY2026 is expected to be significantly higher than in H1, with growth capex mainly concentrated in India. Projects mentioned included expansions in iron foundry, gears, composites, stampings, and forgings at Chakan and Bengaluru.

A key theme was export growth in iron castings. Management stated that a major export project has started dispatches and that revenue recognition should begin from the next quarter due to long supply chain timing. It also indicated that this program is expected to add about INR 200 crore per year of turnover.

The call also highlighted portfolio actions. Management confirmed restructuring in the aluminium vertical in India, including exiting loss making products. It said this impacted growth versus market, but was part of a profitability led portfolio reset.

Separately, the company reiterated that CIE Aluminium Casting India Limited is in the process of being merged with CIE Automotive India Limited, with a Scheme of Amalgamation filed with the NCLT and approvals pending.

Investor takeaway: margins are defended, but visibility remains the key ask

CIE India’s H1 CY2026 results show a business that is still compounding revenue and profit at a healthy pace, while retaining a strong balance sheet. Europe performance is particularly notable for margin recovery after restructuring, even as the underlying market remains weak.

The investor discussion, however, shows that the market is searching for greater predictability on growth relative to industry. Management has stayed consistent in its stance that it does not provide formal forward looking guidance, but it acknowledged investor feedback and pointed to order intake, capacity expansion, and project acceleration as the levers for improved growth.

For investors, the near term monitorables remain clear: whether India input inflation is meaningfully offset over the next two quarters as management expects, and whether new projects, particularly exports and capacity expansions, translate into visible revenue acceleration without sacrificing the company’s stated focus on disciplined returns.