Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
CIE Automotive India Ltd (NSE: CIEINDIA) Q4 2026 Earnings Call dated Apr. 24, 2026
Corporate Participants:
Vikas Sinha — Senior Vice President – Strategy and Chief Investor Relations Officer
Ander Arenaza Alvarez — Executive Director and Group Chief Executive Officer
Analysts:
Smith Shah — Analyst
Viraj — Analyst
Pratik Kothari — Analyst
Unidentified Participant
Ganeshram — Analyst
Unidentified Participant
Priya Ranjan — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the CIE India Q1 CY26 results conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference call is being recorded. I now hand the conference call over to Mr. Smith Shah from ICIC Securities.
Thank you and over to you.
Smith Shah — Analyst
Good afternoon everyone. On behalf of ICICI securities, we would like to welcome you all to CIE Automotive’s Q1 CY26 earnings conference call. Today we have with us from the management team members Mr. Ander Arnaza Alvarez, CEO, Mr. K.J. Prakash, CFO, Mr. Vikas Sinha, Senior VP Strategy and Mr. Oroids Lafwante, Business Controller. We will start the call with brief opening remarks from the management team about the quarter gone by and then we’ll proceed with the Q and A session. Thank you and over to the management.
Vikas Sinha — Senior Vice President – Strategy and Chief Investor Relations Officer
Yeah, thanks mit and you know I welcome all of you on this call. As also Ander, our CEO. I will present CIA results for the for the quarter Q1 CY26. Let me proceed directly to the results. The results of the India operations for Q1C26 are on page 6 of our presentation. Sales at INR 16.2 billion were 15% higher year on year, largely in line with the market. This is an improvement on the 12% growth in Q4C25 and 9% in Q3C25. The growth would have been higher, even higher if the exports in Q1C26 had not faltered largely on account of the geopolitical situation.
The Indian automotive market remains strong though there are uncertainties created by the war in West Asia. As discussed in earlier calls, some of the new orders, especially the ones on the export side, are coming on stream. And we therefore expect positive momentum around growth in the India business to continue into the next few months. The India operations achieved an ebitda margin of 17.6% in Q1C 26 versus 18.6% in Q1C 25 and 16.8% in Q4C 25. The drop in margin on year on year basis is due to three factors.
The first, gas and material cost increase due to the Iran geopolitical situation, energy tariff increase in Maharashtra state and third, if you remember, our Q1C25 EBITDA included a positive one off impact of INR 87 million, which amounted to almost 0.6% of sales. And this was on account of the mega subsidy at our Zahrabad stampings unit. Even with these issues, the EBITDA margin increased by 0.8% sequentially between Q4C25 and Q1C26 as we focus on initiatives to reduce the impact of input cost increases.
On page 7 we have the Q1C 26 results for our European operations. Sales of INR 9.2 billion in Q1C 26 are 17% higher year on year versus Q1C 25. The entire growth is attributable to favorable exchange rate, but the flat sales in Euro terms is as per the market situation. The EBITDA margin in our European operations in Q1C26 was 15.7% versus 13.9% in Q1C25 and 12.7% in Q4C25. Margin recovery is due to the restructuring activities done in CY25 which we had highlighted in our previous calls. We would also like to highlight that the EBIT in Europe the earnings before tax in Europe for the quarter Q1 C26 is almost INR1 billion, of course helped along the way by the favorable exchange rate.
Nevertheless, it represents a healthy bottom line in a not very exciting market situation. Now IHS is forecasting that the European light vehicles market will be slightly negative in next few quarters. Somewhere 0 to 3% negative. While the heavy trucks will grow in low single digits, you know, 3 to 5%. But this growth is on a reduced base. On page 8 we have the consolidated CI India Q1C 26 results. Consolidated sales were INR 25.4 billion, 16% higher versus Q1C 25 and 9% higher sequentially. This is the second successive quarter of 15% plus growth.
Year on year in consolidated sales. EBITDA was INR 4.3 billion, EBIT INR 3.4 billion and EBT INR 3.3 billion. And these are higher year on year by 16%, 18% and 20% respectively. Consolidated EBITDA margin was a robust 16.9%, EBIT 13.2% and EBT 12.9%. In fact, we have recorded the highest absolute quarterly consolidated sales and consolidated EBITDA in our history. And now we proceed to Q and A.
Questions and Answers:
Operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 on their touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes in the line of Rishi Vora with Kotak Securities. Please go ahead.
Viraj
Yeah, hi. Hi Tim. Congratulations on a decent set of numbers. My first question is pertaining to India business. Over the last couple of quarters our top line growth has been let’s say on a blended basis very similar to how the industry has been doing. And earlier we had guided that at least there is an intention to outpace the industry growth anywhere between 3 to 5 percentage points. So. So at least where are we in this journey? I know are there any new orders which you are forcing which you are expecting let’s say to grow in the coming quarters which will help the company at least outpace the industry growth because last 2, 3/4 also has been supported by the industry tailwind onto GST card.
But at least what is company doing to make sure that even when the industry growth moderates we will at least outpace that growth number?
Vikas Sinha
Rishi, I’ll take this question first and then I’ll request Ender to add on the new order new order situation later. Of course you know we have talked about the export orders at you know Aaron Castings. We have talked about the bill forged two wheeler business both on the crankshaft and on the races side where you know we are seeing a whole lot of growth. Especially we’re very excited about the two wheeler crankshaft project, iron castings. There are other projects besides the export order that we are talking about.
There is of course many new orders in the stampings and composite space related to Mahindra itself. And next year of course we are expecting a lot of new orders to come on steam in our forgings crankshaft side. So that’s the reason why we are you know like of course the base for the last two quarters Q4 and Q1 has been very high. You know the base growth in the market has been very high as you rightly pointed out due to the GST reforms. Of course there will be some tapering down of the market but I think as a new order momentum is concerned I think we are in a good space.
There is and therefore that’s the reason why I understand that there might be some tapering down of the market but we are quite confident in the new order in our new order situation. Ender, would you like to add anything? Yes,
Ander Arenaza Alvarez
Yes because you explained perfectly the situation and the view that we have about the next quarter’s growth and growth expectations as, as you Explained because we have several projects in the pipeline now being ramped up. So that is a positive sign. That’s why we’re optimistic on the near future sales. Regarding the new order allocation in the first quarter also was a very good quarter for us. We had almost 3.5 billion rupees on turnover per year, new orders and approximately 11% for EV sector.
So let’s say that that idea of the company and the new orders are coming and we are quite satisfied with the trend. And regarding the capacities and also the way the businesses are growing, mostly all the businesses are doing well and we are adding capacity in all the verticals in order to cope with the demand that is coming. So overall, I would say that the growth trend that we show in the last quarters will continue. That’s our expectation, of course, providing the war and the economy. Let’s say geopolitics are not affecting us too much.
I mean, in our basic scenario, we think that the year, the calendar year 26 will be a good year. That’s our expectations till now at least. And what we expect is to continue this growth trend with all the verticals doing really well. Okay. So overall I would say that we are confident that we will continue the carbon trend in the next quarters.
Viraj
Understood. And just in your opening remarks, you mentioned that export was impacted because of these geopolitical tensions. At least can you give us some color on what are our end markets over here? My sense, it would be Europe and maybe neighboring countries, right?
Vikas Sinha
No, we have some in
Ander Arenaza Alvarez
U.S. No, no.
Vikas Sinha
What do you mention? I mean, both
Ander Arenaza Alvarez
U.S. Market and European market, those are our export markets are not doing well in this first quarter. Okay, so that’s the reason that the export rate did not grow too much. So also some of the projects that we have in the pipeline are export projects and those will, when those projects start during the end of Q2, we will see this export rate to continue growing. So that’s the explanation perhaps, because you want to give some more details.
Vikas Sinha
No, Ander has indicated that we are of course relying on new orders on the export side to pick up the overall export. So that is where, you know, we are quite comfortable that way, you know, in terms of breakup, of course, you know, we have talked about the breakup exports as roughly around 13, 14% based on CY25, out of which the direct exports are roughly 11%. You know, and out of the direct exports, roughly about 3% would be US and the rest is European.
Viraj
There would be not any direct impact like container, not efficiency and market demolishments. It Is end market. It
Vikas Sinha
Is end market. We are not, not so much on containers and all of that. It is purely in numbers, schedules. It is purely schedules.
Viraj
Understand this, this aluminum, like the Orangaba electrical business now will get merged with standalone. Right
Vikas Sinha
Jp
Pratik Kothari
Yes. That is the event to merge Castle into the parent company. Yes.
Viraj
So understood. Now there will be standalone entities then and there will be Europe and which will also include Bill Forge Mexico. Right. So that’s how the reporting now would be. Right. So there won’t be any other subsidy that is beyond Europe.
Pratik Kothari
So India will have also and the standard one.
Viraj
Okay. So wholesale books will be outside of these 10.
Pratik Kothari
It will be a substitute. So
Viraj
Understood. And this last question on the Europe is any outlook on the Metal Castello business? How do you see that business given that last two, three years had been challenging any. Any recovery which you are expecting in CY26 or which gets delayed to CY27?
Ander Arenaza Alvarez
I think. Yes. Sorry,
Vikas Sinha
Under. I was requesting you to.
Ander Arenaza Alvarez
Yes. No, I was started answering the situation in Metalcastello. After some, let’s say business reduction or the slowdown trend that we have in the last years, now it’s in a stable situation. So we see that the business is flat or stable in this moment. Last year you recall we did the restructuring activities. So now the company is perfectly aligned with the turnover level. So the margins are positive and we are in, let’s say very, very nice EBITDA margin status in this moment. So what we see that and we are all expecting is that the American market finally will start growing in the highway sector.
Okay. You know that our main customer is Caterpillar. We expect that in the next quarter this market will ramp up again.
Unidentified Participant
Unfortunately,
Ander Arenaza Alvarez
Due to the different situations in the market, this market has been very, very low, very, very weak in the last couple of years. And we expect that, you know, this is a cyclical business. We expect the recovery to come soon. So. But in this moment we are comfortable with the Metal Castello’s performance. And let’s see if this market comes and we are ready to cope with that growth if it comes.
Viraj
And this last question on gross margins, business gross margins improved by 20% on a sequential basis. So in a while, is there any commodity related inflation which impacted us or is it something which will flow through in 1q. So how should we look at the percentage gross margin levels in the subsequent quarters?
Vikas Sinha
So when you say gross margins, Rishi, what. What are you referring to exactly?
Viraj
The standalone business. Standalone
Vikas Sinha
JP Basically the idea is what would be the impact of the inflation. Right?
Viraj
Yeah. The aluminum, at least aluminum and maybe the steel prices which will be going up from.
Pratik Kothari
Yeah. Also commodities. And there is no issue in terms of pass through, but there could be some other inflation which we will take some time to sort of overcome. So there is, there is a challenge for sure in terms of some imports we were doing which are helping us keep our cost. But basically.
Viraj
But even if it’s a pass through, the margin should dilute, right? The cross margins percentage.
Pratik Kothari
Yeah. Yes, yes. As a percentage, yes.
Viraj
So when should we see that impact? 1Q is where we should see some bit of maybe top line goes faster. But the percentage gross margins will also shrink, right? Or should shrink.
Ander Arenaza Alvarez
Yes, but we will see that in, in the Q2 mainly because the, during the Q1 we didn’t see it because we have not passed through. I mean the hike of the aluminum pressures happened in the last month. Now we are starting with the pass through process, I mean, because we have a delay. So yes, you are right that we have a temporary impact because the delay of one month approximately it affects us. But then we will see this impact in margins because of the dilution because the absolute value of the EBITDA will be the same, but the turnover will be higher because of this pass through.
So we will see certain impact, especially in the aluminum business where the increase of the aluminum price has been really, really high. And also we are facing this also in the rest of the regions in the world again, in Europe or in US the aluminum is also going up mainly because of the restrictions coming from the war. I mean that affected the production of aluminum in the Middle East.
Viraj
Understood. Okay, all the rest, thank you.
Ander Arenaza Alvarez
Thanks Rishek. Thank you very much.
Operator
The next question comes from the line of Pratik Khotari with unique pms. Please go ahead.
Pratik Kothari
Yes, good afternoon and thank you. Because first on India, if we can talk about anecdotally, we do hear about some lines getting shut here or there because of gas issues, some paint issues. So because of this, I mean, so one, how serious is this issue which also called out that India could have done better. I mean not the export, but even locally it would have done better not for this war. So just going into April, May, how serious is this issue from on?
Vikas Sinha
No, no, of course there is, you know, some talk and questioning of things like LPG and so on. So far it has really not affected the schedules or the production. There has been, of course we are taking, we are taking precautions. We are trying to look for alternatives like biogas, ldo, wherever we can, those kind of Things we are doing. But to be fair, there has been really no impact on the schedules because of those issues. And as I talked about, so I wouldn’t say that the domestic market was held back by such issues during this period.
I think the domestic market was okay, if at all. Anything on production was really the inventory in the retail chain at the distributor’s end. That was the key issue in March. It really wasn’t the these kind of issues. Of course we are planning. There is rationing, there is, you know, curtailment of PNG, LPG, etc. That, that of course is there, but it has yet not had a material impact as far as the schedules are concerned. The schedules also for the next say a few weeks going ahead, there is absolutely no impact of such issues so far.
So I don’t think it is right for us to say that, you know, the domestic market was held back by such issues. I don’t think so right now. I don’t think there is too much of an impact. But yes, if it stretches, then of course, you know, these issues will get magnified. The key issue will be less of this and more of inflation. And if the, you know, the OEM start passing on the inflationary impact to the market, then the vehicle prices will go up. That is what we have to worry about. Then of course, you know, Andrew did talk about of what is happening on the aluminium side, which in fact, again, to be fair, the increase in aluminium prices was happening even before February 28.
It was not as if it was not happening before. There was inflation on aluminum cost even before that. But it has of course accelerated after the war started in the Gulf. So the inflationary impact is very important. There could be some disruption in supply chain, less, you know, on, you know, it could also be on the aluminum side. So we have to worry about it. But at this point of time it is not making an impact. That is our assessment.
Pratik Kothari
Sorry, sorry, go ahead.
Ander Arenaza Alvarez
No, I just wanted to make a comment on Vika’s statement. Okay. The risk that we can have here in this environment is that in certain cases, because of these geopolitical issues and also with the logistic difficulties that are happening, happening now in the world, we can have certain, our customers can have certain supply chain issues and that would have certain temporary impact on the demands in the short term. Okay. So that’s what we can also expect because of the situation. So that’s the main risk that we see in the short term.
What we are now seeing, as Vika said, is that all our customers, they expect to continue the same production trend. So the only problem they can have is if the supply chain is disrupted for any reason. Okay, that’s the, the thing that we need to monitor closely.
Pratik Kothari
Just to confirm on the export front, you said the the growth was muted because of logistical issues or the end demand issues.
Vikas Sinha
End demand and demand schedules, not really. On logistics, again, you know, there are certain, you know, constraints on, you know, as Rishi also asked, containers etc, but that’s not the major impact. Again, all of this may get accentuated going forward. We are not discounting any of the risks. The risks are all there. The risk of inflation, the risk of logistics, the supply chain risk. In fact, there’s another bigger risk, fertilizer. If the fertilizer supply chain gets disrupted and then there is a bad monsoon, then there will be a double impact on the sowing season in the later half of the year and that will have its own impact.
So the risks are all there. But those risks have not manifested in a very big way so far.
Pratik Kothari
Last on Europe. So last time there was major such supply chain disruptions back in 2022, energy prices, we gained a lot of market share, maybe at the expense of weekends. And again, anecdotally we do hear about lot of either order shifting out of Europe to some other geographies or within that, some stronger players taking lead. So while we understand that the end market is not growing or growth rates there are muted. Given the issue back again in Europe three, four years later, do we see gaining at the expense of weekends?
Vikas Sinha
Andrew, the question is, is the European auto component industry consolidating and will we gain in the next two to three years?
Ander Arenaza Alvarez
Okay. It is difficult to say if we will gain in this moment, but we expect that we will gain and the market will continue consolidating. Okay. The consolidation is happening already in Europe. It’s clear. I mean there are a lot of companies, especially in the, in Germany, France, we see a lot of companies struggling and the smaller companies are also struggling. So the trend of the customers right now is consolidating. We have every week, every month, we have interactions with the customers in this sense.
So we are working actively on this field. So we expect that we at least we will remain solid in our current turnover levels and hopefully if this consolidation finally happens, then we will have the chance to grow. So we are optimistic on that. The signals are not yet, or let’s say the results of the execution of this consolidation is not yet obtained or fixed from our side, but we expect that this will happen. Yes.
Pratik Kothari
Great. Thank you and all the best. Yes. Thanks Pratik.
Ander Arenaza Alvarez
Thank you.
Operator
The next question comes from the line of Vijay Kumar Pandey with Access Capital. Please go ahead.
Unidentified Participant
Hi Sazra. Thank you for taking my question and congratulations for a good set of numbers. I have a couple of questions and wanted to check first on the gas and energy price increase and the material what can if you can please quantify the impact on the Indian business as well as in the European business from this and was it in mainly for the one month or. And do we expect to see this to increase over the next coming periods like because now it will be if the board process it will continue for two months.
So if you can help us with this.
Vikas Sinha
Vijay. No, I. I would assume you are asking that whether first the gas price increases will remain at this level going forward. So that price increase has happened. Is that. And what is the impact of that on our financials in Q1, right? Are these the two questions?
Unidentified Participant
Yes. Yes. We
Vikas Sinha
Assume that given the supply chain risks and given the disruption in the supply chain of gas we do expect this to remain elevated for some time. So it’s not really a temporary phenomena gas and gas increase. So we are you know like more concerned if the supply remains constant rather some price increases will happen and we expect the price increases to be there. In terms of the impact right now the impact has not been much. You know we did talk about the drop in our margins from you know like in Q1 our margin was 18.6.
Today it is 17.6. 0.6 of that is coming from you know the stamping subsidy and the rest is divided between the energy tariff increase and the gas increase that you are talking about. So if you look at 1% 0.6 is coming from the subsidy out of that 0.4. Some part of that is coming from what we are talking about the gas price increase and some part of it is coming from the energy tariff increase. If you remember in our last call also we had said that there was an increase in power tariffs in Maharashtra which was having an impact in, in our year end result.
We had quantified that impact. So that point 4% drop is divided between these two, these two things. So you can make an assessment. You know like it is somewhere between, you know, you know 0.1, you know, 0.2, 0.3. That kind of impact we are talking about as far as the gas is concerned. Okay.
Unidentified Participant
Okay. Second, because the new export order for the U.S. Business so that remains on the track that that is not getting impacted from the End user market or from the zero.
Vikas Sinha
You know of course right now the tariff thing as you know is, is still open but it is now more or less, you know, like we know where it is. So we have zero. We have had no impact on our export orders to the US and as Ander pointed out, we’ll start in Q2 and of course the bulk of it will be in the second half of the year.
Unidentified Participant
When it comes to the euro, the guidance, the IHF guidance is pretty weak first, second quarter, third quarter. So we wanted to check if downwards is the more going to be more downward risk from here how are you seeing the on ground situation but like 5% decline in production numbers for second quarter. So you expect it could go further down than this or things can be better from here or like this is the worst case scenario and also on our margin. So our margin has been pretty volatile in Europe at least from last three, four quarters.
So just want to get a steady state number. What is our expectation in the near term and the long run?
Vikas Sinha
So I will make a few comments, I’ll make a few comments and then I’ll request Andrew to talk about the European market a little bit. I think the European market is very steady at. It is almost like stable, you know, 16 million units of production. The issue is how much is the Chinese share in that. That’s all you know there is. It’s pretty much stable. We are not looking at, you know, minus 5, going to minus 10. Of course on a quarter to quarter basis IHS is talking about minus 5 and minus 1. But if you look at the year, you know, the entire year prediction it is still about minus one, minus two.
So that’s not much of a difference. So it is steady and it is expected to remain in this range 16, 16 and a half million for the next couple of years as per IHS. So the market is steady. It is not moving up and down. The second question, it is steady at a low level, that’s all. The second question around margins that our margins were fluctuating. Now if you look at it, our margins were, you know, like we were doing some restructuring activities. If you put back the restructuring activities, we have been in the range of 14 to 15% or 14 to 16% in that range.
If you take, you know, if you add back the restructuring cost that we are talking about. So in Europe also we are at a very steady margin.
Pratik Kothari
So
Vikas Sinha
Right now what you are seeing, you know we had restructuring activities going back to Q2 of last year. So some of that was Affected the European margins that were reported were affected by the restructuring cost. In this quarter. You are, there is no restructuring cost. You are seeing the full impact of those restructuring activities. So the margin has been steady, somewhere around 15% if you take away the restructuring cost. So to say that is since you are talking about a steady state on both the market on the margin side.
But now I will hand it to Ander, he will explain more, you know, what is actually going behind rather than just the numbers.
Ander Arenaza Alvarez
No, you explained it perfectly because I mean the situation in the market in Europe is stable. I would say that the behavior or the performance that we expect for the next quarters is that we will see a rather stable market. So not big changes are expected. I mean perhaps because of the geopolitical tensions we could see certain slowdown. But overall I think the impact of the war is not big in Europe. Okay, so also regarding Spain and regarding the gas and energy price increases in Spain due to the high percentage of renewable energy production, the energy prices has not go up in this first quarter.
So we expect that the energy prices will remain more or less under control. And also the future of the gas for next year are around €35 per megawatt. So let’s say quite stable. So let’s say that our view of the near future in Europe is we will be more or less stable. And regarding the margins, we saw a certain recovery after the restructuring activity that we did last year and we expect to be in that range in the near future or during the next quarters. If additional restructuring small activities are needed, we will accomplish them because what we are now looking is always to the long run and just to be ready to keep and to maintain our margins in the long term.
So that’s the approach that we have. So we have a profitable business car generating unit in Europe despite this low base and we will continue like this.
Unidentified Participant
Thank you sir. Thank you for the detailed answer. Just wanted to more of a broad level question with the Chinese plus entering into the European market and setting up at the do we have a plan or can we get also to the like to supply products to Chinese companies or will that not be feasible? Or if you can just comment on that,
Ander Arenaza Alvarez
Chinese cars that are sold now in Europe are mainly produced in China. They are now entering the European market and they will start producing. That’s the plan. They have to produce in Europe and if they produce in Europe for sure we will be there. Okay, we have been quoting. We are working with them so far locally we don’t have, let’s say Chinese customers in this moment in Europe. But mainly because there is no production. Okay. Once the production starts, we will probably be there because in the European area we are quite competitive supplier.
Of course the competition is worldwide. But what we expect that certain local rules, local content rules will be there. And there are also another barriers like the carbon adjustment on the border. I mean the CBAM activities, all these kind of things will come. So we expect to be supplier for any OEM that will produce cars in Europe.
Unidentified Participant
Thank you, sir. And all the best for coming quarters.
Ander Arenaza Alvarez
Thank you. Yeah,
Pratik Kothari
Thanks Vijay.
Operator
Thank you. The next question comes from the line of Ganesh Ram with Unify Capital. Please go ahead.
Ganeshram
Thank you. Because Ander has been very clear so far. I just have a couple of questions. The first one is on the India market itself because you previously indicated that directionally grown 9, 30, 12%, 15%. And when we look at the forecast from IHS, when we compare how this quarter has been to the next quarter compared to what we expect in next few quarters or about 9% in every category this quarter, but expectations are around 8 to 10% in the remaining few quarters. How do we expect to perform relative to this industry?
Do you think they can be an outperformance of 3%, 4% within new orders that are coming in. What’s the quantum of our performance you expect,
Vikas Sinha
You know, we do expect to be a little higher than the market. I will not really give, you know, we have been last 2, 3/4 we have done well. But a few quarters before that we were a little tardy. So yes, we are confident about the growth. We should be market plus. Of course it also depends on, you know, the market. We have many customers, so you know, how different customers behave. For example, Hyundai and Bajaj. Bajaj did well in Q1. Hyundai did not do as well as well in Q1. And then within those customers, you know, there will be some models which perform better or worse.
So depending on that, you know, so but we are more or less, you know, across different customers, across many models. So we do expect we are, you know, we are in a very comfortable situation as far as that is concerned. We do expect to be little higher than the market. But given, you know, how everything pans out, you know, we, we will see the quantum. So I leave it at that. It’s very hard for me or you know, like not right for me to even try to justify, you know, what kind of outperformance. I think you are right.
The market will, you know, taper down a little bit given from the GST highs but it’s still very reasonably, it’s reasonably good. Hopefully you know the impact of geopolitics, petrol price increases which you know everyone is expecting maybe a few weeks later that does not have a dramatic impact. So I would say that we are comfortable on, on the growth side but quantum, let’s leave it at that.
Ganeshram
Okay, but do you think you’ll be able to sustain at the low teens level and do you have any production constraints currently? I think last quarter you mentioned there were some constraints because of the ramp up. So just to check if that that has been elevated now
Vikas Sinha
We are in the process of increasing our capacity. If you look at our growth numbers, growth capex numbers, you know this quarter we do expect growth capex in India to be higher than last year. That is number one. Number two, you know right now, you know almost 95% of the growth capex is being done in, done in India. So we are adding capacity and we are adding capacity across the board. If you look at our annual report we have clearly mentioned that almost all verticals except maybe magnets, we are adding capacity which is as per the new orders.
So right now we are okay with this capacity situation. 8, 10% growth is fine but lot of capacity additions are happening because of the, because of the new orders. Capacity should not be a constraint going forward. But you know, as I said next few months or next, you know, one, one and a half years, I think there is a lot of focus on growth capex in India so that will continue. So we’ll continue to do that. Understood.
Ganeshram
And just my last question is on the export impact that you were talking about from India. Would you have an estimate of how much of exports could have been achieved this quarter that has probably been delayed to the coming few quarters?
Vikas Sinha
That’s my last question. Thank
Ganeshram
You.
Vikas Sinha
No, no thanks. You know it was not delayed. The schedules were lower, the schedules were lower. Now if the Indian market grew in the range, you know like we have talked about that almost 10% growth for, for light vehicles and 20% growth for you know, two wheelers and the other segments. The exports was in say mid single digits. This basically on the in Q1, but Q2 onwards as Ander mentioned, we are banking on new orders so that situation will change. You know, no matter what happens on the geopolitics side I think for us our export performance will improve due to onwards because of our new orders.
That’s what.
Ganeshram
So just to clarify you’re saying it wasn’t an impact because of logistics, it was an impact because of schedules or is it that the schedules are impacted by logistics? Just to be clear.
Vikas Sinha
Hard for me to say. Let’s you know, from our point of view it was schedules, you know, like it’s not that we were not able to send our goods across. So that’s why I’m saying less logistics. Well, for them as whatever is happening on the supply chain, Williams there that could have been a factor. But for us, the schedules, that’s all.
Operator
Okay, thank you. Because all the best. Thank you.
Vikas Sinha
Yeah, thanks. Thanks. Thank
Operator
You very much. Thank you. The next question comes from the line of Bharat Seth with Quest Investment Advisors. Please go ahead.
Unidentified Participant
Hi, good afternoon. Ender and Vikas. Thanks for the opportunity. And you stated in that consolidation in Europe is happening. So can you give little more color for which product? Say particularly crankshaft and metal Castello also. So if you can give some color, how do we see we are with the consolidation getting market share. Hence may be able to do, I mean some kind of a growth in down the line next three, four quarters.
Ander Arenaza Alvarez
Yes, the reality on the consolidation, if we look at our crankshaft production for example in our European units we have been able to maintain the crankshaft production in the in the last quarters. And considering that the internal combustion engines volumes are slowly, slowly going down with the EVs growing up and also with the entrance of the Chinese competitors, then we see that we have been already consolidating partially this production of concept. What is happening in Europe is that our customers now they are concerned that in their supply base they have suppliers with very complicated financial situation and some of them they are already struggling.
If you consider that in the north of Europe, for example, there are also some stresses on the energy prices and also some inflation, the materials and so on. Then the situation, the financial situation of these struggling competitors will worsen in the next quarters. So the customers are looking for the solutions to let’s say assure their supply and they are coming to us in order to increase the production. So that’s what’s going on. Some specific suppliers are being, let’s say eliminated and the strongest suppliers will continue.
And in that let’s say consolidation process, Cie India is very well positioned because we have a very solid financial situation. Our companies are running perfectly smoothly. Our quality levels, delivery performance are exceptional. So in that environment, I think we will be one of the winners on this consolidation. That’s the bet. That’s the reality. And now we will continue. Of course it’s not a nice situation because of course our growth will come from the. Let’s say the bankruptcy or the difficulties in other competitors.
That’s not the best way to grow. But of course that’s the market and we need to adapt and we need to survive in this difficult market environment. So that’s the basics of our view and we think that we are very well positioned to continue with our, let’s say, production, hopefully with certain growth and at least with margin, maintaining the margins and even improving them if possible.
Unidentified Participant
And how about metal Castello, what’s our outlook now? Currently we are operating what level and how do we see is there any improvement or not?
Ander Arenaza Alvarez
Meta Castello, as I explained before, Metacastelle is doing very well now. The company is now adapted in all the structure and the manpower. Everything is in line with the current production levels and demand levels. So the company is in a very solid situation with good margins, with ebitda margins around 20% of margin. So it’s in a very solid position regarding the market. You know that all these have a way of highway products are, let’s say, in a very weak market situation. And we are ready to grow and to recuperate the margins once the market comes back.
Our dependence on US market is important. So we are waiting for the US market to rebound and start producing. So my comment would be in Europe the off highway production is very low. The strong production is coming from US and also from Asia. So our position, we look for US market and we’re waiting for that Also one important comment on Meta Castello, if you recall in previous quarters when we were talking about the EV programs that we were awarded. Correct. Those EV programs unfortunately did not come.
And the real production of these EV products will be, I don’t know, 10% or just a minor fraction of the expected volumes. Okay. And that’s a reality. So that’s one of the reasons why we are not say, growing or we are not recovering the previous levels. That’s the market reality in us. You know that the electrification has gone down and most of the electric programs have been cancelled by our customers. And that’s something that. Okay, we need to wait. Probably will come later on in the. In the future, but in the next quarters we can.
We are not expecting them to come. Okay, A blitz while this administration is in office in US.
Unidentified Participant
And second question is related again. Now this energy fossil fuel crisis is erupted in Europe. So do you think that EV adoption will. Adoption of EV will accelerate then what it was in past and how do we thing than now about a ICE engine market?
Pratik Kothari
So. Yes,
Vikas Sinha
Hello.
Unidentified Participant
Yeah, hi.
Vikas Sinha
I just hope Anders is
Pratik Kothari
It Seems that we have lost hundreds.
Vikas Sinha
Sorry,
Ander Arenaza Alvarez
Sorry. I think the connection was up. So I don’t know where I got to cut in the communication.
Unidentified Participant
So you may restart, please.
Ander Arenaza Alvarez
We were talking about the EV market in Europe,
Unidentified Participant
Correct? Because of this again crisis in the fossil fuel. How do we see the adoption again accelerate? I mean,
Ander Arenaza Alvarez
Yes, what we see is that you are right that at least in the last month after the war happened and the petrol prices went up dramatically in Europe then there has been a reaction from the market and more. The EV market has seen an acceleration. So we see this trend, I mean recovering a little bit. The best sold car in March in Europe has been the Tesla model Y again. I mean they were very low on sales and now they recuperated. So this is something that is happening. But what we see is a certain recovery to the previous forecast.
Okay, so there is no big, big jump on that. There’s no big movement. And we still think that the problems on the EV adoptions are still the lack of infrastructures and the ranch anxiety that is not yet solved. I mean These ranges of 500 km, 450 km are not enough to convince the mass consumers. Okay, so we see certain acceleration. We are okay with that because you know that we have been in the last years working on the EV side also. So we are comfortable with that. So we are adapting our production to the demand of the customer.
So we have no chance than looking for the balance between the two technologies.
Unidentified Participant
Okay, and last question on India side because earlier we had a lot of tail end of customer win but which we were not, I mean for one or other reason was not able to really ramp up and grow. So how do we think about despite, I mean this new deal win, how do we see this really a tail end can start making a bigger, I mean contribution to our sales.
Vikas Sinha
Bhai, thanks. You know, a lot of these new orders, you know, it is, it is for as I said, not team but the, you know like if you look at our four main anchor customers, M&M as FES, Maruti and Bajaj. Beyond that for example, Ford is becoming a very big customer. Hyundai is very important. Royal Enfield is very important. So a lot of these, you know, new order, you know, Allison is getting more important. We have been steadily working with grandeur over many, many years. Very, very small increases every year, but now very substantial.
So that part is happening. It’s not that it is not happening. As we have pointed out. Given that the diversity in our customer base sometimes, you know, when M and M was growing, Bajaj was Not growing. Now when Bajaj is growing, Hunda is not growing as much. So this, you know that portfolio balancing will happen. But as I said, you know we are quite okay with the new order situation. Yet in the meantime, you know, some few quarters back we had the issue with RCI Hosur production. Then there were certain, you know, electric vehicle orders that had not come about.
All of this had got bunched together. But now hopefully, you know, you know it is being more balanced. So we have now we are seeing a much more balanced growth. So I don’t think we have any, you know, you know, to put it very simply, we don’t have issues with either our customer base or even you know, the diversity of products, you know, or even new orders. As Ander was pointing out, our new order performances has been pretty good. So even going forward next 15, 18 months also we don’t have much of an issue around new orders.
So we are quite comfortable there. Earlier what had happened that you know that were dealer had got mixed together. Now we have much more balanced things. So you are seeing a much more balanced growth that, that, that you are seeing now. And that is exactly what we are saying. Once that balance happens you will not have that problem. So that’s how I’ll put it. It is just, you know, it has been balanced out. Like for example in Q1 the exports did not do very well. You know, exports, we have NPM from our aluminium plant, they didn’t do that well.
But you know the other side did well. Hyundai didn’t do well, only 2% or something like that in Q1 which is, you know, given that the light vehicle market grew almost 10% it’s like way down the performance but it didn’t impact us that much because that balancing is happening now. So that’s how we are quite comfortable on the new order side on you know, the diversity of products, diversity of customers. I don’t think those are issues. The issue earlier was the munching which I think hopefully that’s behind us now.
Okay,
Unidentified Participant
Thank you and all the best.
Vikas Sinha
Yeah, thanks.
Operator
Thank you. Thank you very much. The next question comes from the line of Priya Ranjan with HDFC mc. Please go ahead.
Priya Ranjan
Hello. Thank you. Just couple of things. One is on the Capex side you do you see there is acceleration in Capex this year because last year we were short of capacities in many of the quarters and I mean when the demand has picked up and how do we see this, do you need to increase the kind of presses, maybe
Operator
Higher
Priya Ranjan
Tonnage presses etc is Required now. I mean what is the sense capex and capacity increase?
Vikas Sinha
I’ll of course leave it to JP and Ander to answer. You know, give more color on the details. But the answer to your question is in India the growth capex will be much higher this year and probably next year also. And the other part, are we looking at different tonnage of presses in forgings, in aluminium casting etc? Yes, we are, we are looking at at that also. So with that Anders, I’ll request you to give your perspective.
Ander Arenaza Alvarez
Yes, in India this quarter we have already invested around a little bit more than 900 million rupees. That is around close to 6% of sales. So it’s in line with our internal, let’s say control targets. But you are right, the second half of this year we expect to boost the capex and we will, let’s say probably surpass this 6, 7% of the turnover in India that we are, let’s say fixing as a control target regarding the different pressures and machineries and everything that we are now looking for. You are right.
I mean we are adding at least three new forging lines in our forging business. We are also adding stamping, stamping line, I mean metal stamping line for our customers because we are also fully booked in this moment. We are also adding iron casting, molding line also to the to increase our capacities and to cope with the demand that is coming for the next year. So as you can see, we are adding machinery and capacity. All this capacity will be installed in the next quarters. So we expect that our capacity will increase and of course our production will increase.
So we are aligning the demand with the CapEx and that’s why we control perfectly the situation. I can tell you that we have not been short of production in this video. Yes, we have been tight in certain technologies, but not short. And in the future we are adding the capacity to, let’s say to go with our customers, to be in line with our customers requirements in terms of capacity. Some of them, they are expecting big growth. The new projects are also there and of course we need to be ready for the growth when it’s coming.
So that’s the more or less give you a flavor of let’s say adding capacity in almost all the technologies. I would say that except in the magnets, that is a very specific business. The rest of the businesses will add new capacities
Priya Ranjan
For full year. I mean how much capex we are planning now, I mean this year for.
Ander Arenaza Alvarez
You can imagine that we have done 1 billion in or close to 1 billion in one quarter. We can talk about this 4 to 5 billion. That would be the capex that we can be expecting in India in this calendar year.
Priya Ranjan
And I mean I’m just little bit puzzled about your metal Castello performance. I mean if I look at the Caterpillar global growth they have been growing very, very strongly. I mean the North America market etc is growing like 18%. 17 if you look at so what category of the caterpillar you are catering to
Viraj
And
Priya Ranjan
That’s why you are underperforming. I mean if you look at the caterpillar numbers, I mean that it doesn’t show that. I mean there is a weakness. I mean why should we end up there unless we have certain segments which caterpillar is also underperforming and why
Ander Arenaza Alvarez
We are working for, for Caterpillar in the transmission sector. Okay. And. And the balance of the production, that of course depends because Caterpillar has his own internal capacities and then they outsource part of the components to let’s say reliable customers and suppliers like us. And also they are producing part of their production in Asia, in India and other countries. Okay, so, so let’s say that with Caterpillar we had this slowdown because of the product mix that unfortunately we were there and we expect that this production and at least with the comments coming from Caterpillar is that this will ramp up mainly when there is a situation when the customer is producing and deciding make or buy then our position is weaker.
But we expect to grow and to recuperate our market share in the next quarters. So the point on Caterpillar is we depend on them partially. In Italy and with all these probably the tariff issues and geopolitical, they decided to integrate or to insource more than outsourcing the production. That’s the balance or the decisions that our customers are doing, they are not always very transparent with the suppliers. You know, they make their own decisions depending on the situations. So we are respecting this, this growth to come and we are ready and the relations and the strategic relation we have with them is, is fantastic.
So no, no issues there.
Priya Ranjan
Okay. Okay, great. All the best.
Operator
Thanks. Thank you. Ladies and gentlemen, this will be our last question. It’s from the line of Hiraj Kacharya with Simpl. Please go ahead.
Viraj
Yeah, hi. Thanks a lot. Just two questions. First is, you know, we talked about us benefiting from consolidation, you know, starting, you know, next few quarters. Any color you can give, you know, how is the conversation, you know, in your conversation with customers is we benefit more from the European entity or you see a further ramp up in exports from India to Europe.
Vikas Sinha
Raj, let me take this question first and then, you know, Ander can add more details based on his experience. Now, first question around consolidation in Europe. Yes, as under pointed out, consolidation is happening. Some manifestation is we are able to maintain our crankshaft production even in a declining market. But that consolidation takes time. As, as you know, it does not happen at one go. Yes, consolidation will happen eventually. It is not to manifest itself in the next next quarter or the next two quarters or something like that.
Eventually it will happen. And because such strong players with strong manufacturing capabilities as well as a very good financial position, we expect to benefit in the medium term. It’s not going to happen in the next one year or so, something like that. Because when we say consolidation will happen, if you recollect Europe used to do about 20 million car production, say pre Covid or whatever, and that’s now down to 16 million plus there is the threat from Chinese imports or Chinese supply in, in Europe, which will even make.
That is the reason why consolidation will happen. But these things are stretched over a period of time because what happens is that the capacities don’t go out of the business. You know, like most of the time they are brought up, they are either bought by a private equity guy or by somebody who tries to, you know, buy all the underperforming assets. And then it takes some time before it leaves, leaves the market. That’s, you know, that’s really on, on consolidation. It will happen. It will take time.
The second aspect on whether, you know, the European light vehicle industry will start outsourcing more to India. Now that question Ander had answered in the last call. But I’ll, you know, I’ll repeat that, you know, the outsourcing from Europe to India has been more on the truck side and less on the, you know, on the light vehicle side. What is happening is that with the European FTA that India and Europe had, that fda, I think there has been an interest on a lot of buyers in the light vehicle space.
Also to look at outsourcing from outside Europe and they are of course considering different geographies. But the first places where that’s going to happen are in iron castings where we are seeing the impact. We are seeing a lot of RFQs coming in gears and machining where, you know, India has a very big competitive advantage. That’s happening some, some on the forging side and perhaps at some point of time on aluminum casting. But unfortunately, aluminum casting India is not that competitive at this given point of time.
So yes, that will also happen. But none of, neither the consolidation nor the exports will happen in a hurry. That’s, you know, that’s something we’ll ask you to keep in mind. So it’s not going to happen in this calendar year, for example. There will not be a tangible impact over the next two, three, five years. Definitely both the things will happen and on both we will gain. So with that generic remark, I’ll request Andrew to add details and, and his perspective.
Ander Arenaza Alvarez
No, there is a clear situation now and a clear interest from most of our customers here in Europe to localize the production in India. I mean we are in contact with them. They are absolutely, really interested in our capacities in India. And we are developing, we are quoting where they are visiting us. They are auditing our facilities in aluminum, in forgings, machining, gears, castings. I mean we have a very strong commercial activity in this moment regarding this transfer of the potential exports from India to Europe.
So we are optimistic, very optimistic on that. Okay. We are preparing ourselves to be ready to supply properly to Europe in the next years. So that will be a reality. So I think that India will be a winning market, a winning region on this European supply, especially because of the competitivity and let’s say price pressures that European OEMs are having. So in this sense we are perfectly located to supply from India to Europe and we will do that, let’s say according to our customers demand. So that’s why we are adding our capacities and we are preparing ourselves to be in very good positions in terms of quality and delivery because that’s the, the main risk that all the suppliers we can have.
I mean the quality requirements and the delivery requirements on European OEMs are very, very stream. So we need to be well prepared not to fail. So that’s the challenge and that’s the reality. And so we are optimistic and we are preparing the company to continue growing both internally, locally in India and also of course with additional export that we will see happening in the, in the next quarters.
Viraj
Okay, just one last question. See you mentioned about 400 to 500 crores of capex in the Indian entity. You know that that is a step up, I get that. But you know, even post that your cash accretion will just further expand, right? I mean the surplus cash which you have any color in terms of, you know, you know, new products or acquisitions or you know, anything in the.
Ander Arenaza Alvarez
Okay, yes. This is also, you know that we are in a cash position as you said and we have the capability to continue increasing our capex, increasing our capacities and that will be one reality. The second growth area that could be the inorganic growth, I mean growing through M and A. We are also active on that field. It’s true that it is difficult to close operations in India in this moment. Also the price and the expectations are very high. So. But we continue in a very active way to look for potential partnership where we can grow our business, we can join forces with other players.
So this is an activity that we are also active. So unfortunately in the next last years we did not close any operation. But we continue active on this area and we would like to to have one additional operation so that will boost also our growth.
Viraj
Thank you very much and good luck.
Ander Arenaza Alvarez
Thank you. Thank you very much.
Operator
Thank you. Ladies and gentlemen. That was the last question for today. I would now like to hand the conference over to the management for closing comments.
Ander Arenaza Alvarez
So I would like to thank you all the participants for the, for the questions and the well directed questions. As always, very interesting. It was a big pleasure to be with you and to answer and I hope we answered properly and all our team, all our team answered properly to your questions. And also I would like to thank as always to all CIE Automotive India’s team for the great work done in this quarter and we expect that we will continue doing well and showing good results in the next quarter. So thank you everybody and have a nice day.
Operator
Thank you on behalf of ICIC Securities. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.