CIE Automotive (CIEINDIA)

FairStock Score: 55/100 — STEADY

Score breakdown: P/E: 1/3 · ROCE: 1/2 · Growth: 1/2 · Dividend: 0/1

Key Financials

Strengths

• Very low debt-to-equity of 0.06 and positive free cash flow of ₹456 crore provide financial stability.
• Promoter holding of 65.70% aligns management interest with minority shareholders.
• Recent sales growth of 13.42% and profit growth of 12.17% show encouraging momentum.
• Piotroski score of 7/9 indicates good earnings quality and financial health.
• Dividend yield of 1.48% adds a modest return while waiting.

Concerns

• Valuation is demanding: P/E of 21.74, P/B of 3.33, and PEG of 1.70 leave little margin of safety.
• ROE of 11.57% is moderate relative to the 3.33 times book value being paid.
• Five-year revenue CAGR of only 6.81% makes the current 13.42% growth look possibly cyclical rather than structural.
• Auto components are historically linked to automobile cycle swings, which could hurt earnings momentum.

AI Analysis

When I look at CIE Automotive, I see a decent, conservatively run auto-component business, but I do not see a bargain. The balance sheet is clean—debt to equity is just 0.06 and free cash flow is ₹456 crore. A Piotroski score of 7/9 suggests the earnings are solid, and 65.70% promoter holding means the owners are aligned with public shareholders. This is the sort of foundation I like. But Graham taught me to treat price seriously. At ₹468.65, I am being asked to pay 21.74 times earnings and 3.33 times book value, when book value is ₹140.79 and ROE is only 11.57%. That is not a compelling trade-off. ROCE of 14.74% is respectable, but not wide enough to give me a large margin of safety. The recent momentum is encouraging: sales grew 13.42%, profit grew 12.17%, and the latest quarter shows sales of ₹2,393 crore with net profit of ₹204 crore. Yet the five-year revenue CAGR is just 6.81%. I need to know whether the company has truly shifted into a higher gear or is enjoying a cyclical up-move. The PEG ratio of 1.70 tells me growth is already priced in. If CIE can compound profits at double digits while keeping debt low and converting earnings into cash, it could be a fine stalwart. But at this price, the dividend yield of 1.48% is not enough compensation. As Buffett would say, it is far better to buy a wonderful company at a fair price than a fair company at a wonderful price. This is a steady business; the price is merely fair. I would rather wait for a better entry.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer