CIE Automotive India Ltd (NSE: CIEINDIA) Q2 2025 Earnings Call dated Oct. 25, 2024
Corporate Participants:
Vikas Sinha — Senior Vice President, Strategy
Ander Arenaza Alvarez — Executive Director and Group Chief Executive Officer
Analysts:
Vishakha Maliwal — Analyst
Siddhant Dand — Analyst
Jinesh Gandhi — Analyst
Pratik Kothari — Analyst
Bharat Sheth — Analyst
Nemish Shah — Analyst
Shivam — Analyst
Nitish Rege — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to CIE India Q3 and N-M CY ’24 Conference Call hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Ms. Vishakha from ICICI Securities. Thank you and over to you, ma’am.
Vishakha Maliwal — Analyst
Thanks, Nivedita. Good afternoon, everyone. Thanks to CIE India Auto Limited management for giving us the opportunity to host the call.
We have here, in the call, the senior management represented by Mr. Ander Alvarez, CEO; Mr. K. Jayaprakash, CFO; Mr. Vikas Sinha, Senior VP, Strategy; Mr. Oroitz Lafuente, Business Controller; and Mr. Swapnil Soudagar, DGM Strategy.
Over to the management to take this ahead. Thank you.
Vikas Sinha — Senior Vice President, Strategy
Yes, thanks Vishakha. This is Vikas. I welcome all of you on this call as also Ander, our CEO.
We will go through the Q3 C ’24 results of CIE Automotive India Limited. First up on Page 5, we have an overview of the simplified holding structure of CIE India and its subsidiaries. Please do have a look.
We now start with results of the India operations for Q3 C ’24 on Page 7. Sales were INR14,707 million; EBITDA INR2,606 million; EBIT INR2,032 million; and EBT INR1,997 million. The sales grew 2.2% year-on-year; EBITDA 8%; EBIT 9%; and EBT 14%. EBITDA margin in Q3 C ’24 is at 17.7% compared to 16.7% in Q3 C ’23 and 18.1% in Q2 C ’24. The year-on-year sales growth of 2.2% was same as the weighted average market growth across the market segments we operate in.
There are some mitigating factors to consider. The light vehicle market has shown a decline in this quarter, a very slight decline in this quarter as compared to the same period last year. Tractor market remained largely flat at a 3% growth over last year. The two-wheeler market has grown well on the back of festive demand. The delay in the ramp-up of some of our orders has unfortunately continued and this has impacted sales growth, but that should be corrected in the coming quarters. We have postponed that a little bit. Nevertheless, we are happy to note that EBT grew by a healthy 14% in spite of the anemic growth this quarter. We will continue to focus on operational improvement, which is shown by the margin trends despite the weak market environment. Overall, we have positive expectations on growth and margins from all our verticals in India.
The market situation in India is — we are cautiously optimistic about it with mixed growth trajectories in the different segments. The trend of growth in the two-wheeler segment should continue and the festive season is expected to give a boost to this segment. Tractors will continue to be steady on a high base with rural income showing recovery. The light vehicle market, though, will see a steady growth of around 5% unlike the heady growth seen over the last few quarters.
Now, we move to the results of our European operations for Q3 C ’24 on Page 8. Sales fell to INR5,899 million from INR7,262 in Q3 C ’23 and is a combination of the drop in the European light vehicle market and the extended slowdown in the U.S. off-highway market affecting Metalcastello that we have been talking about since the last few quarters. The drop in sales sequentially between Q3 C ’24 and Q2 C ’24 was 22%, which is similar to the drop in the light vehicle market which fell by 19% and added to by the U.S. off-highway market drop.
The Q3 C ’24 EBITDA in Europe was INR942 million; EBIT INR719 million; and EBT INR602 million. EBITDA margin in Q3 C ’24 was 16.0% compared to 17.2% in Q3 C ’23 and 17.0% in Q2 C ’24, which shows that despite the sales drop, the corrective measures that we had started taking in the previous quarter has helped us protect our margin somewhat. The market situation in the coming quarters remains uncertain with the uncertainty in the light vehicle market continuing.
The EV penetration in the European auto sales has also been stagnating around 12% to 14% and will continue to be at the same level, given the uncertainty around the evolution of the technology. Our attempt will be to be in step with the market while maintaining our margins.
And now if we go to Page 9, we will see the consolidated results for Q3 C ’24. Sales were INR20,606 million; EBITDA INR3,548 million; EBIT INR2,750 million; and EBT INR2,600 million. Despite the European sales drop, the consolidated EBITDA margin for the quarter was 17.2% versus 16.9% in Q3 C ’23. While sales dropped by 5%; EBITDA dropped by 3%; EBIT by 4%; however, EBT grew by 2%.
YTD September nine month results for the India operations are on Page 11. Sales were INR43,558 million; EBITDA INR7,905 million; EBIT INR6,234 million; EBT INR6,049 million; and PAT INR4,503 million. This translates into a sales growth of 5% compared to the corresponding period in C ’23, higher than the YTD weighted average market growth. While sales grew by 5%, PAT grew by 22% year-on-year and this was achieved by improving efficiencies, product mix and strong focus on costs.
The YTD nine-month results for Europe are on Page 12. Sales were INR22,445 million, a 12% decrease over the corresponding period last year. EBITDA was INR3,669 million; EBIT INR2,842 million; EBT INR2,455 million; and PAT INR1,923 million. To be noted here is that last year’s PAT includes INR3,356 million of profit from discontinued operations as mentioned previously. Despite the sales drop, EBITDA margin came in at around 16.3%.
The consolidated YTD nine-month results are on Page 13. Sales were INR66,003 million, a slight decrease over last year; EBITDA was INR11,574 million; EBIT INR9,076 million; EBT INR8,504 million; and PAT INR6,425 million. That is about INR642 crores. As explained in the previous section, PAT includes INR3,356 million of profits — no, that was for the previous year. Excluding the consolidated PAT for nine months YTD September ’23, it was INR6,206 million. So, last year, the PAT — YTD PAT included the INR3,356 million of profits from CFG. Excluding that, last year’s YTD September ’23 PAT was INR6,206 million. And therefore, if you compare with the YTD September ’24 PAT of INR6,425 million, we have achieved a PAT growth of 3.5% this year. It is to be noted that despite YTD consolidated sales being minus 1%, the PAT without discontinued operations has grown by 3.5%.
So, with that, we can proceed to Q&A. Thanks.
Questions and Answers:
Operator
Thank you very much. [Operator Instructions] The first question is from the line of Siddhant from Goodwill. Please go ahead.
Siddhant Dand
Yeah. Hi, Ander. I wanted to ask you about what do you feel about the health of European OEMs? Because I was just going through Stellantis, VW and the headlines and the commentary doesn’t seem too great.
Ander Arenaza Alvarez
Yes. Hello. Good morning, everybody. Now, our view is that the European OEMs are now suffering a lot because of the uncertainty that we see in the market. There is — there are several things that are going on in the European market or in the automotive world, and one of them is the electrification. As you know, electrification in Europe has slowed down. The growth of electrification has slowed down. We were expecting to end this year at about 20% of market share with pure electric vehicles, and the reality is that there will be around 12% to 13%. So, this is much slower than expected.
On top of that, next year, from January next year, there will be penalties to the OEMs if they pass these levels of CO2 emissions in their average fleets. So, if they are not getting the required electrified vehicles, they will have to pay a huge amount of money in penalties to the European Commission. So, this is also creating a big stress in the market and in the OEMs.
And also, that additionally, with this uncertainty in the technology, the market is going down. We saw the first quarter was not bad. The second quarter was weaker. Third quarter has been quite weak with a drop of around 7% in the market. And probably, we will see this trend to continue in the next quarters. So, yes, all the car makers are — even they say that — has issued profit warnings as the situation is quite unstable and uncertain. So, that’s the environment we need to work for and we need to manage. And that’s one of the reasons of the drop that we have in the European — in our European business.
On top of that, you know that we have another business working for off-highway trucks in — for U.S., mainly in our Metalcastello gears business. That is still depressed. This market is still depressed. Still, we expect that the — let’s say, that this market will revamp during mid of next year after the U.S. elections are over and then the new — let’s say, the new government starts with the new policies. So, we will expect that the market will go up in the second half of the year. Okay?
So, that’s the real tough environment. Our customers are having difficulties. The uncertainty is there. The electrification is kind of blocked or the path of the growth is not happening. And on top of that, we have the — in Europe, at least the view in Europe is the additional stress factor is the entrance of the Chinese vehicles that are getting, let’s say, bigger and bigger market share. Now, with the duties that have been imposed, probably there will be a certain slowdown of the Chinese introduction. But the commercial world is also not helping to the global economy. So, this is the environment that we are trying to navigate through. And okay, this is the situation.
Operator
Thank you for the question, sir. The next question is from the line of Jinesh Gandhi from Ambit Capital. Please go ahead, sir.
Jinesh Gandhi
Yeah, hi. Ander, just to clarify, did you indicate that Metalcastello business and the end market in U.S. for off-highway will recover from second half CY ’25 or we expect that to happen from first half itself, given new government would be in place?
Ander Arenaza Alvarez
We expect that this market to recover by Q2, Q3, 2025. Okay? We will expect that in the next couple of quarters, we will keep the current situation, let’s say, the current depressed situation, we will not drop further. I mean, we are now in the bottom side of the cycle. Then we expect to start recovering slowly, slowly. That’s what our customers are informing us. And also, as you know, we got in Metalcastello an important business for electric transmission manufacturer in U.S. And these programs have been also delayed in U.S. So once these programs start ramping up, we will see also our sales in Metalcastello going up.
So yes, we need to wait. We are now managing the situation with our cost-cutting activities. We are keeping the margins rationally. I think that we have done a good job there. And once we get again the market and we get again the sales in the next quarters, I mean, hopefully the sooner the better, but we can expect that it will happen in the Q2, Q3 next year. Then we will see our figures again ramping up.
Jinesh Gandhi
Okay. Okay. And what would be the current run rate for Metalcastello in terms of quarterly run rate of revenues in 3Q, how it was at peak and how it was in second quarter? If you can throw some light on that?
Vikas Sinha
Current run rate. What is the monthly rate right now and what it used to be earlier?
Ander Arenaza Alvarez
Okay. So in just monthly figures, I can give you monthly figures. We were about EUR6 million per month. That was the average, between EUR6 million to EUR6.5 million. And now we are at EUR4 million — between EUR4 million and EUR4.5 million. So this is a drop of 30% approximately that we see for the next — we see in the last quarters. And probably we will keep this rate in the next couple of quarters and then we will go up slowly. And what we are projecting is that in the Q3, Q4, we will hit at least EUR5.5 million in 2025.
Jinesh Gandhi
Got it. Got it. And secondly, you have — on the margin side in the European business, so we have done exceptionally good job to maintain margin. Can you talk about what areas have we focused on cost-cutting to maintain margin? Does it come at expense of scaling up business when the tide turns for the European operations? How do you think from that perspective?
Ander Arenaza Alvarez
Okay. Yes, that is one of the key things that now we are trying to manage because the market is what it is and it is difficult to get additional turnover, at least in the short term. So what we are now doing is we are trying to keep our cost as low as possible. We are stopping the factories and applying certain regulations and policies to stop the factories one day per week, these kinds of things, eliminating all the extra time, eliminating all the contract workers, temporary workers, and trying to reduce at minimum the cost level. This is something that we have done and we have done successfully. So we have been able to keep our margins.
Okay, of course, we lose some margin because we cannot offset all the drop. This is not possible, but we only lost 1%, 2%, and this is what we are trying to do. Our companies, even in this situation, are generating cash, so we are generating a unit even in this condition, so we are quite relaxed in that sense. So there is no panic, no fear at all. So the viability of the business is there, and we will for sure be stronger once this crisis is over. Okay? You know that in this situation, the weaker competitors will suffer, so there will be a consolidation. We are already perceiving certain difficulties in some of our competitors in the region, so we expect to be one of the winners when we consolidate the business coming from those stressed companies. Okay?
So that’s the situation. It’s a sad situation. It’s not the best of the scenarios, but this is something that we need to manage. We did it in the past and we will do now in the — currently.
Jinesh Gandhi
Got it. Got it. And last question is on the India business. So you talked about having delay in some of the orders, which impacted growth. Can you elaborate on how big this order is? How much is the delay? By when do you expect commercialization of those orders? Any flavor on that would be very helpful.
Vikas Sinha
Delay in the India order book.
Ander Arenaza Alvarez
Okay. Yes. In India, we — let’s say that we had this performance on sales that is approximately a 2% growth only in this quarter. We were expecting the market to behave better than this. It’s true. We saw that the, let’s say, four-wheeler market had just a negative performance in this quarter in India. We think that this is mainly coming from the inventory issues and also certain, let’s say, market perception, but we are optimistic for the future. We think this will be overcome and we will see, again, 5% to 6% growth in the next quarter. So I think the Indian market reduction is just a temporary issue. We don’t see any risk there.
So on top of that, we have been hit by the delay of the certain projects that we have, especially the export projects, and this is directly related to the status of the European automotive market. Okay? With this slowdown and especially with the delay of all the electrification programs that the customers are postponing because of the situation that they are facing. Okay? So there is a general delay on all the electrification programs and we are just waiting for them. So we will probably see in India the new programs that we got, especially in our Hosur plant, I mean, our brand new plant in Hosur. We already see certain ramp-ups happening and in the next quarters, we will see this growth because these projects are ramping up, especially these programs for Stellantis in Europe. Okay?
So yes, the delay in the programs plus the weak market gave us just a small growth in this quarter, but okay, we are quite sure that we will continue growing properly in the next quarter. So we are still optimistic. We were expecting more for this quarter. Unfortunately, the market did not perform, but I think the basics and, let’s say, the background of the Indian market I think is very, very positive. Two-wheeler is doing well. I think tractors and commercial vehicles are weak and those should recover also in the future.
Jinesh Gandhi
Got it. Got it. Great. Thanks and all the best.
Ander Arenaza Alvarez
Thank you very much.
Operator
Thank you. The next question is from the line of Pratik Kothari from Unique PMS. Go ahead, sir.
Pratik Kothari
Yes, hi. Good afternoon. So one on India, I mean, despite the investments that we have made over the last few years and that being not being ramped up, our margins are, I mean, very good. So this is — I mean, we have completely controlled our cost and this is what we are seeing or this is despite waiting for ramp-up to come and maybe we should see something more?
Ander Arenaza Alvarez
No, you are right. I mean, we have controlled our costs perfectly in all this period. You know that we have been pushing a lot in efficiency and in the internal improvements and these actions are paying results. So in that sense, we are quite satisfied. Our margins are just close to this 18% that we were looking for and we are quite sure that we will get those figures. And if we had, had this additional growth that we were expecting, probably we would have improved our margins too. Okay? So yes, I think in India we are doing well. The potential to improve even more, of course, is it will be supported by the growth of our turnover and that is what we expect to do in the next quarters.
Pratik Kothari
Correct. And so this would be, I believe, function of the productivity gains that we have been trying to implement and see for the longest of times.
Vikas Sinha
This improvement in India margins is due to productivity improvements that we have been doing and these are the past projects in productivity improvement.
Ander Arenaza Alvarez
Yes, that is true. But not only that, I mean, during this week, we have been working here with all the operational teams and we have identified several improvement plans in all the verticals and we continue this path. So we can expect even further improvements and, let’s say, better performance in the next years, thanks to this action plan that we have already prepared. And of course, if these action plans are supported by higher sales, the situation will be much better. Okay?
So I would say that all the verticals are doing quite well in India. We have had better growth in the aluminum. I mean, aluminum is outperforming the rest of the businesses in terms of growth. Also, our composite business is growing well. Our gear business is also doing well. Then the businesses, depending more on commercial vehicles and tractors, have been suffering more, like our castings or our forging divisions. But overall, you saw the results and the margins. We were able to keep this close to 18%, a little bit less than 18%. So that is the target that we have in the short term.
Pratik Kothari
Correct. And, sir, one comment on exports from India. I mean, we were at 12%, 13% of sales. Where are we and any outlook, any developments there?
Ander Arenaza Alvarez
Yeah. The exports in this quarter were reduced a little bit because of the market situation outside. I mean, the demand has gone down in Europe and U.S., so the export will be around 10%, because exactly around 10% is this quarter.
Vikas Sinha
Between 10% and 11%.
Ander Arenaza Alvarez
Yes, between 10% and 11%. That is the reality. And we are already working to increase this export rate. Okay? You know that as a global company, we have a policy to be local to local — to supply our customers local to local. That was the CIE global policy, because we are presenting all the automotive regions in the world. So avoiding transport costs, big inventories, geopolitical risks, foreign exchange rate risks, that is the global strategy. But, of course, in certain technologies where we are very competitive in India, we will take the advantage of exporting as much as we can. So this is also one of the areas that we need to improve. Compared to our competitors, we are below, mainly because of this CIE strategy, as we are a global company. But we expect to continue growing in the near future. So at least reaching this 15% of our export rate should be quite easy in the next years.
Pratik Kothari
Correct, correct. And sir, last question on Europe and EV market specifically. I mean, the governments that are trying to put this anti-dumping or trade barriers, etc., for the Chinese onslaught. But for us, as companies, I mean, do we go out and get these Chinese OEMs to be our customers? Because, I mean, if they still go through, I mean, the cars might be sold in Europe, but it would not be through our customers. So how do we think about that?
Ander Arenaza Alvarez
Yes, I think the Chinese car makers, of course, they are producing in China and exporting to Europe, are now thinking because of these import duties that they have been imposed, they are pushing or they are now preparing their production in Europe, okay? They want to localize the production of their cars in Europe, so they are already announced as BYD or, let’s say, SAIC, that they are planning to produce cars in Europe. And, of course, we will try to be their suppliers. Once they are in Europe, they will need European suppliers. So we will for sure try to work for them, okay? This is one of the targets.
We know that it will be not easy because of their current supply base and costs are different in China, but they will necessarily need to adapt to the cost standard that are in Europe. So I’m sure that we will be able to work with them, okay? We are working for almost all the car makers in the world, and I can say that. So we have a very, very, let’s say, huge panel of customers, completely balanced, and no one is more than 10% in our total turnover. So that’s a good point that we have a diversified portfolio, and we want to continue like that. And if Chinese are coming to Europe, we will supply them happily from Europe.
Pratik Kothari
Great. Thank you, and all the best.
Ander Arenaza Alvarez
Thank you very much.
Vikas Sinha
Yeah, thanks, Pratik.
Operator
Thank you. The next question is from the line of V. Rangan from An Analyst [Phonetic]. Please go ahead, sir.
Vikas Sinha
We are unable to hear. Hello? Moderator, I think we can’t hear anything from…
Operator
Sir, we can’t hear. We’re taking the next question from the line of Bharat Sheth from Quest Investment.
Bharat Sheth
Hi, good afternoon, and thanks for the opportunity. Sir, in initial, your remark on the European market, you said that certain duties related to levy on account of this emission norm. So if you can give a little more color, and that, because of the impact, will remain only up to this Q4, I mean, say, last quarter of calendar year, or next year, how do we see for Europe market? Metalcastello, you have already given some color. So remaining part of the business, how do we see?
Ander Arenaza Alvarez
Okay. What we were explaining is that in Europe, in this Q3, we saw a drop of about 7% in the market, and what we can expect is that in the next quarters, this trend, this level will continue, okay, in this minus 7%, minus 10%, those — in that range, the market will remain in that situation, no one is expecting a rebound in the short term, okay, unless there is any, let’s say, political action that we are not aware of. Okay? Regarding the — because we are always talking about production, okay — production in Europe. Part of the sales in Europe are coming from the imports that the Chinese car makers are doing. Approximately 1 million Chinese cars are sold in Europe in this moment. These cars are mainly electric vehicles, where they can offer very cheap and very competitive cars that are, let’s say, affecting to the electric cars produced in Europe, because most of the — the price gap is important. They are getting this market share.
And in order to avoid this situation, the European Commission set up certain import duties to the Chinese electric cars. Okay? Mainly, there is a variation between — they have a basic duty of 10%. And on top of that 10%, some of the car makers have a duty of even 38-additional-percent. Okay? So we expect that this will slow down the import of the Chinese cars. We will see, because we don’t have any data yet. But what we see also and what we think is that these import duties will encourage Chinese car makers to implement and to launch factories in Europe to produce in Europe to avoid this import duty. So we will see certain changes in the market for sure due to this situation. That’s our view.
And coming back to the Metalcastello’s evolution, Metalcastello is in a very, let’s say, weak situation, because we are now selling this in the range of EUR4 million to EUR4.5 million per month, mainly because of the drop in the export market to the U.S. And, you know the off-highway market in U.S. is very low. And we expect this to recover in the second half of next year. So during the next quarters, we will maintain the current situation. Despite this drop, we have done our job in terms of cost reduction. So the profitability is nice. We maintain a nice EBITDA margin there. And we are generating cash. So let’s say that we are waiting for the market to revamp, and we will be ready to capture when this happens. So in this moment, the situation is that we are not nervous. The situation is full under control. And we will wait for the better moments to come.
Bharat Sheth
So this — because of import duty on this Chinese manufacturer, so can we expect that from calendar — in calendar ’25, in Q1 or Q2, we see some kind of a positive trend in the Europe market?
Ander Arenaza Alvarez
We think that in the electric vehicle market, we should see this improvement, yes. That’s what we can expect. But, okay, this is something that we need to wait and see. But that is the expectation. And in fact, that is the reason of the duty imposed by the European Commission. Okay? So the explanation of the duty is because these low prices that Chinese cars are getting, they are offering in Europe is mainly because of the subsidies that they are receiving in China. So they are — they wanted to offset and to have, let’s say, the same level for all of us.
Bharat Sheth
Sir, here there are two questions, as you rightly said that, say, some Chinese car will start looking to manufacture in Europe. But with that duty also coming, so there will be an equal playing field for one European player. So first we’ll see, I mean, improvement in the European car manufacturer, or we’ll see that Chinese will start procuring some component from the — within Europe?
Ander Arenaza Alvarez
I think with the Chinese car makers producing in Europe, they will avoid these duties as they will produce in Europe. So that duty will not happen. And of course, producing in Europe, they will have higher costs. But — and we also expect that they will source their components from European suppliers. And we expect to be there to source them. Okay? That’s the basic. So we think that we will have additional customers to work with. They will also — the point is that from the technological point, the Chinese electric vehicles are, let’s say, now in the top of the technology and they are getting — let’s say, they are in a very good position from technological point. So we will see how the European car makers react and how this, let’s say, commercial battle ends. Okay?
But from our point of view, let’s say that we are customer-agnostic and technology-agnostic, so we would be happy to work with Chinese and even to continue working with our European customers where we have excellent relationship. And we are also supporting them in the electric vehicles as we have a lot of projects in the pipeline that are delayed with Volkswagen, with Ford, with Daimler. We are working with all of them, with Stellantis, with Renault. So we are working with all of them. So we expect that if this growth of the electric vehicles happen, we will also get this business in CIE and in CIE India too.
Bharat Sheth
And is it also, just to understand a little more, affecting their new development program also, European car manufacturing?
Vikas Sinha
Is this uncertainty around EVs affecting new model development in — for European OEM manufacturers, new platforms? So they are unable to decide what to develop?
Ander Arenaza Alvarez
Okay. There is a big uncertainty there, yes. Okay, I didn’t catch the question, sorry. No, the uncertainty is that certain car makers, they are now pushing for the production of the internal combustion engines because the demand of the electric vehicles has gone down. So there is a change in their minds and a change in their policy. In the short term, I mean, I’m not thinking in the long term, but in the short term, just to adapt to the market requirements, that is happening for sure.
We are, for example, seeing that the diesel cars are growing. We are producing certain components for diesel and suddenly they are going up, mainly because of the, let’s say, short-term demand that is more inclined to go to diesel and gasoline rather than the electric. But in the mid-term, we see that the electrification will win. Okay? That is — it seems that it’s a very clear picture. And we were checking the IHS forecasts for the 2030 when six months ago they were saying that 60% of the cars will be pure electric in 2030, that is in five, six years’ time. Now they say that in 2030, only 50% of the cars will be pure electric.
And in all the interactions that we have with our customers and they have their own, let’s say, studies and forecasts, and most of them, they are showing that they expect the electric vehicles to be between 30% to 40% in that period. So there is a big uncertainty there. I mean, depending on the policies from the European Commission, it can be 50%, it can be 30%. I mean, depending on the policy, it will change.
But what we see now for sure is that there is a slowdown because of the — let’s say, the users that don’t rely 100% on the electric vehicle because the infrastructure is not still there. And there are certain reasons that are out there, range and safety and all these kinds of things that are not fully solved yet.
Vikas Sinha
Bharat bhai, is that okay? Or do you want more explanation? Hello? Can you hear us, moderator?
Operator
Sir?
Vikas Sinha
Yeah.
Operator
The participant line got disconnected. The next question is from the line of Nemish Shah from Emkay Investment Managers Limited. Please go ahead.
Nemish Shah
Yeah, thanks for the opportunity. So I had a few questions on our India business. So you mentioned that the delay in ramp-up of certain export projects. So are these orders for global customers, or are these orders for domestic customers for their exports? If you can just give some clarity on it?
Ander Arenaza Alvarez
No. They are for global customers. They are from global customers like Stellantis. And these are our main customers for these programs of exports.
Nemish Shah
Got it. And so in the India business, our medium to long-term aspiration has been to grow 400 to 500 bps faster than the blended average industry growth. So do you feel — so is it linked to these projects which are getting delayed? Or there is something else as well that — so we need to add some more customers or gain some more market share for that growth to pick up?
Ander Arenaza Alvarez
You’re right. I mean, we still keep this target to grow this 5% above the market. Unfortunately, we didn’t get these figures mainly because of the delay on these programs. I mean, that has been a reality. But in the future, we will continue pursuing for that. And we are — our order book that we follow every month is also in a very healthy situation. So we are getting new businesses. So we expect to — once these programs start ramping up and the new products that we are getting are ramping up, we hope that we will be able to match this target, yes.
Nemish Shah
Yeah, got it. Yeah, that’s it from my side. Thank you.
Ander Arenaza Alvarez
Thank you.
Vikas Sinha
Thank you.
Operator
Thank you. [Operator Instructions]. The next question is from the line of Shivam who is an individual investor. Please go ahead.
Shivam
Hello. Yeah, thanks for my question, sir. As you said that the European pressure will be till next half of the next financial year. So will there be pressure on the revenues till then?
Vikas Sinha
Shivam, can you repeat it? Are you asking whether there will be revenue pressure in Europe for us in the next calendar year? Is that the question?
Shivam
Yes, yes, yes.
Vikas Sinha
Yes, the answer is yes. As pointed out, in Europe, we expect the off-road highway market to start coming back from Q2 or Q3 of next year. And as far as the light vehicle market is concerned, Ander has explained that for the next few quarters, we do expect it to remain declining on a year-on-year basis for the next few quarters, largely because of the uncertainty around the various factors that Ander explained, the emission tax, the uncertainty around the EV market, etc. So for the next few quarters, till this thing clears out a little bit more, even the light vehicle market will remain depressed. And we expect it to — like this quarter, the European light vehicle market de-grew by 7%. So in that kind of range is what we expect for the next few quarters.
Shivam
So you are planning for a negative year next year on a consolidated basis?
Vikas Sinha
Let us not talk about our revenues. We are talking about the market in Europe.
Shivam
Yeah. And now my follow-up is what you are telling here, like what [Speech Overlap] next calendar year, you are giving?
Vikas Sinha
Let us not talk about some forward-looking statements here. But as far as, we do expect the Indian market to recover, as we pointed out, we expect the light vehicle market was negative this quarter. It will not remain negative. I think the tractor markets are picking up. The two-wheeler market remains quite good, close to 8% to 10% growth, definitely. So to that extent, the Indian market will recover and the European market will be negative at least for the next two quarters — two or three quarters. So that is it.
As far as what happens to our consolidated revenue, we will come to it. As we said, it is not only about the markets. It is also about some of our order book coming back, like being ramped up, which have been delayed, especially the Stellantis order in India, which is a very large order that we are talking about. So what happens to our consolidated revenue, we will see. We will perhaps see the trends in the first two quarters next year, and then we can take a call on that. But what we are talking about is the market situation in India and Europe.
Shivam
So you are saying that the Indian business will compensate for the growth that will lag in the European business. That’s what you…
Vikas Sinha
As I said, let us not go there in terms of what happens to our — we are not forecasting our revenue here. And as I said, let us look at what happens in Q4, Q1, and then we can make some estimates.
Shivam
So is there any plan, like internal plan, to get some growth out of Europe in this weak market, or there won’t be any growth that we will be expecting?
Vikas Sinha
Next two, three quarters, definitely not. We are looking at a negative market situation. As I said, once it stabilizes — let us go back to what is happening in the European light vehicle market. There are two factors. The EV demand is not ramping up as fast as what people thought it would be. Ander explained how IHS has reduced forecasts, all OEMs are reducing forecasts. Over and above that, there is this talk of this emission penalty, which will be levied if you do not produce enough EVs. So because of these two contradictory factors, there is a lot of uncertainty in the light vehicle market in Europe.
Once that uncertainty clears off, then, of course, the production trends would be clearer. Over and above that, there is also the third factor that Ander talked about, is the imports from China, which is almost amounting to 1 million this year. Normally, European sales and production are fairly equal to each other. This year, there has been some difference on a YTD basis, almost 1 million difference is there. So this is the third factor.
So once all of these three factors clear off to an extent, then we will know what the real production trends the European market is. Till then, there is uncertainty. In that uncertainty, we do think that the drop in market that we see in this quarter, a similar kind of trend will go on for at least two or three quarters. Once it clears off, things will become clearer. We don’t know what would be the — will it start growing back again? Perhaps. But we don’t know for sure at this point of time. So right now, we are focused on this market environment and working within this market environment.
Shivam
And any feedback that you are getting from your customers, like are they stopping orders or they are building up the inventory or they are not getting the fresh orders? Like any feedback, like any outlook from them you are getting?
Vikas Sinha
European OEMs you are talking about?
Shivam
Yeah, yeah, your European customers.
Vikas Sinha
So whatever we talked about is based on the feedback from them only.
Shivam
Okay, okay, okay. Okay, sir. Thank you so much.
Vikas Sinha
Yeah, thank you.
Ander Arenaza Alvarez
Thank you.
Operator
Thank you. The next question is from the line of Nitish from ChrysCapital. Please go ahead, sir.
Nitish Rege
Hi, thank you for the opportunity. Just one question. How has the growth been for us from our non-anchor accounts: Toyota, Hyundai, Kia, Royal Enfield? Could you spell that out, please?
Vikas Sinha
So growth outside M&M, Maruti, and Bajaj. How is it?
Nitish Rege
Yeah, outside our anchor accounts, over the last one to two years, sir.
Ander Arenaza Alvarez
Okay. The customers are behaving according to the market. I mean, this is the evolution. We are now trying to grow with Hyundai. You know that in the last quarters, the evolution was not as good as expected, but the trend and expectations are positive. We are developing our, let’s say, customer pie, and we are trying to grow with them. And we have several projects with them in the negotiations and in the pipeline. So my view of this is that we are trying to, let’s say, open our customer portfolio and to grow, especially with Toyota, with Hyundai, with, let’s say, even Volkswagen. We are growing with all of them. With Tata, we have several projects also in the pipeline.
So I think we are, as I said, it’s — we started — our main customer was Mahindra & Mahindra and Bajaj are the two main pillars from our customer pie. But in the future, we want to open this pie and get this redistributed share or distributed rate of all the car makers in India. So we are working with all of them, and the expectations are positive with all of them.
Vikas Sinha
So if you look at the growth number, which is 2% for us, M&M Auto is obviously much higher than that. M&M Tractors round about at that figure, so is Maruti. And Bajaj is also much higher. So between M&M and Bajaj — M&M Auto and Bajaj, we have done well. Maruti and Mahindra tractors are okay, okay. And exports have not done as well, as Ander pointed out. Frankly, exports, YTD this year has been lower than last year, and therefore the proportion has come down, as Ander has pointed out. So that is where we are, but for the other non-anchor customers, they have done reasonably well. So if you look at it in this fashion, then you cannot — it is the export part of the business that has not done as well. But the other non-anchor customers in India are doing reasonably well.
Nitish Rege
And how large of our revenue mix would be our non-anchor customers?
Vikas Sinha
Our anchor customers, if you look at, M&M, Maruti and Bajaj, is roughly around 55% of our business in India. Exports currently are roughly about — or last year, if you — like those are the numbers that we have put out in the public domain, was roughly about 14% last year. So the others were the domestic non-anchor customers.
Nitish Rege
Okay, so the domestic non-anchor customers have seen a good growth on a small basis.
Vikas Sinha
They are reasonable, they are reasonable. Where this year we have not done well is on the export side, especially because some of our orders, and Ander has specifically pointed out about Stellantis, which is a global order that we have, has not done — it will do well. I think Stellantis is making a comeback. And once it ramps up, it will be a good addition to our top line.
Nitish Rege
Okay, thank you so much.
Vikas Sinha
Yeah, thank you.
Operator
Thank you. The next question is from the line of Siddhant from Goodwill. Please go ahead, sir.
Siddhant Dand
Yeah, just in the Chinese OEMs may set up manufacturing in Europe, have Chinese auto ancillaries also started acquiring European assets or setting up manufacturing there, especially in the space that we are catering to?
Vikas Sinha
Are Chinese component companies entering Europe and setting up plants in Europe?
Ander Arenaza Alvarez
Okay, not yet. We have seen a couple of examples of Chinese component makers entering Europe, but not — I can tell you that till now there is no — not relevant move. Just a small company, so a small amount of companies that are entering Europe. I would say that this move has not happened yet.
Nitish Rege
Okay, and there are — like you said, there’s some anti-dumping duties and anti-subsidy duties that have been put on cars. Are these duties also applicable on components of cars?
Ander Arenaza Alvarez
No, no, this isn’t. It’s only applicable to the cars, to the vehicles.
Siddhant Dand
Thanks. Okay, understood. Thank you.
Ander Arenaza Alvarez
Thank you.
Operator
The next question is from the line of Bharat Sheth from Quest Investment. Please go ahead, sir.
Bharat Sheth
Hi, sir, sorry, I — my line was disconnected and I was dropped off. Just one remaining question and answer, I already got it. And wish you all, I mean, the festive season greetings. Thank you.
Ander Arenaza Alvarez
Thank you very much. The same for you.
Vikas Sinha
Thank you, Bharat bhai.
Operator
As there are no further questions, I would now like to hand the conference over to management for closing comment.
Ander Arenaza Alvarez
Okay, so thank you very much to all the participants for your questions and for your interest in our company. We hope that we answered the questions properly and you have now the better understanding of where we are as a company. We thank you for your trust on us and we expect to continue growing and doing a good job. And as always, I will say thank you to all the team that is working in CIE India that is doing a fantastic job and my — let’s say, my recognition to all of them. And finally, I wish you a very happy festive season and very happy Diwali. Goodbye.
Vikas Sinha
Yeah. Thanks. Happy Diwali to all. Bye.
Operator
[Operator Closing Remarks]