Profitability focus to drive gains for Mahindra CIE Automotive

The company is selling its loss-making German CV forging business

From its lows in mid-December, the stock of auto component maker, Mahindra CIE Automotive, is up over 13 per cent in trade. The gains are on expectations that a focus on profitability, steady growth in Indian operations and improving capital efficiency will improve its margin profile and return ratios.

Among the multiple steps the company has taken to improve its financials is the plan to sell its German commercial vehicle forging operation housed under CIE Forging Germany. The loss-making entity contributed about a fifth to consolidated revenues, with operating profit margins in low single digits. Its losses over the past