CIE Automotive India Ltd (NSE: CIEINDIA) Q3 2025 Earnings Call dated Feb. 21, 2025
Corporate Participants:
Vikas Sinha — Senior Vice President – Strategy and Chief Investor Relations Officer.
Ander Arenaza Alvarez — Executive Director and Group Chief Executive Officer
Analysts:
Vishakha Maliwal — Analyst
Amit Agicha — Analyst
Devang Shah — Analyst
Apoorva — Analyst
Pratik Kothari — Analyst
Nishant Chauhan — Analyst
Presentation:
Operator
Ladies and gentlemen, good afternoon and welcome to the CIE India’s Q4 and full year CY24 results conference call hosted by ICICI Securities. As a reminder, all participant lines will be in the lesson only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the 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 over to Ms. Vishaka Maliwal from ICICI Securities. Thank you. And over to you.
Vishakha Maliwal — Analyst
Thanks, Yashdashi. Good afternoon everyone. Thanks to CIE Automotive India 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. Jaiprakash, CFO Mr. Vikas Sina, Senior VP Strategy. Mr. Urwit. Business controller and Mr. Swapnan Swadhar, EGM strategy over to the management to take this ahead. Thank you.
Vikas Sinha — Senior Vice President – Strategy and Chief Investor Relations Officer.
Yeah, thanks Vishakha. This is Vikas. I welcome all of you on this call as also Ander, our CEO. I will present CIE India results for the Q4 C24 quarter and full year C24 and I’m referring to the investor presentation that we had uploaded. Let me begin with the section that provides an overview of the company. Page five shows the legal structure of the company. Please note that the Mexican plant is now a subsidiary of Cie Galfor Europe which holds 99.81% of its equity.
This follows the conversion of Bill Forge Mexico’s debt into equity using the cash generated in Europe which included partly the proceeds from the divestment of Cie Forge Germany. For historical reasons, the finances of Mexico are clubbed under India. In this investor presentation, the Mexican business is small with sales approximately of INR3 billion at an EBITDA margin of 12 to 13%. Pages 6 and 7 provide details of Cie India’s geographic, technological and market wise segments. Plants in India accounted for 68% of CIE India’s sales with 32% coming from Europe.
This 68% includes that 3 billion from INR3 billion from Mexico. Please note, you will recall that this ratio was roughly the reverse at the time of inception of CIE India in 2015. So India has been gradually growing. As you can also see, our India business is very diversified in terms of technologies and segments. India in contrast, our European business is more focused on forgings. And there are three segments, Light vehicles, off highway and trucks. The light vehicle segment includes EVs also here I think we owe you an explanation because normally we have been speaking as far as our European business is concerned only about light vehicles and off highway. If you recall our investor presentation from Last last year, that is CY23 full year investor presentation that we made in February of last year.
We had presented exact details of our segments in Europe. Roughly about 20% came from trucks, 20% from off highway and about 60% from light vehicles. We don’t have exact numbers for this year, but roughly that ratio remains the same. Now the trucks business was legacy business of shafts, largely shafts and spindles. We had expected this legacy business to. Keep coming down as our other segments grew. And therefore, you know, this was not really a focus business for us. It’s just a legacy business that we were continuing. So we did not talk too much about it. Unfortunately, what has happened is in the last few quarters the truck business in Europe has taken a beating. And therefore, you know, we’ll have to include it in the explanations. I think in Q3 and Q4 more than 25% drop. I think in Q3, 28% drop in truck business in Europe and Q4 35% drop. So that’s, you know, affected our business somewhat. So that’s the explanation we thought that we should provide to you because we owe that to you. But nevertheless, if you look at all our segments, you will realize that CIE Automotive India is unique as a large diversified auto components groups with presence across many processes, product lines, location and customers. You know, this kind of diversification across geographies, technologies and markets market segments is probably not available elsewhere. Let me now proceed to the section on Q4C24 results. The results of the India operations for Q4C24 is on page 9. The light vehicle segment, which is our largest, slowed to a growth of 3.2% in this quarter while trucks were massively negative in terms of growth. Tractors and two wheelers grew 12% and 8% respectively. Sales at INR14.5 billion were 4% higher year on year. In line with the weighted average market growth, the India operations achieved an EBITDA margin of 17% in Q4C24 versus 16.5% in Q4C23 and 17.7% in Q3C24. The stock reduction effect at year end was a contributor to the slight sequential reduction in ebitda margin. In Q4C24, EBITDA grew 7% year on year compared to sales growth of 3.2, sales growth of 4%, EBIT 5% and EBIT 8%, all higher than the sales growth of 4%. As I referred on page 10, we have the Q4C24 results for our European operations. As we have discussed earlier, our key markets, the European light vehicle, the US off highway and European MSCV markets are experiencing significant decline. Sales of INR5.8 billion in Q4C 24 are 21% lower year on year versus Q4C 23 and even 2% lower than Q3C 24. Sequentially. In spite of such a large drop in sales, we have managed an EBITDA margin of 15% in Q4C 24 versus 16.9% in Q4C 23 and 16% in Q3C 24. On page 11 we have the consolidated CIE India Q. Q4C24 results consolidated sales were INR20.3 billion which was 5% lower. Year on year EBITDA was INR3.3 billion, EBT INR2.75 billion and EBIT INR2.3 billion lower by 6%, 9% and 4% respectively, more or less in line with the decline in sales. Let’s move on to the section on full year C24 results. The full year C24 results for our Indian operations are on page 13. Sales increased by 5% versus C23 to INR58.1 billion which is marginally higher than the weighted average market growth. Light vehicles which account for 52% of our sales grew by 3.8%. Only two wheelers which account for 21% grew excellently at 16%. These are market growths, but the other two segments of tractors which is 18% of sales and trucks 9% of sales declined. So this gives you why we are talking about a slower growth rate. The EBITDA margin of 17.9% was significantly higher than the 16.7% achieved in C23 though it includes a 0.7% of recurrent EBITDA on account of the subsidy received by our aluminum business in Q1 C24 while sales grew by 5%. In C24 EBITDA grew 12%, EBIT 14%, EBT 17% and PAT by 20% which is significant. On page 14 we have the full year results of C24 for our European operations. As explained earlier, our major markets European Light Vehicles, US off highway and European MHCVs declined in C24, especially the latter two suffering big declines. This is reflected in a large decline in our sales of 14% in C24 to INR28.2 billion. This had a cascading effect with EBITDA declining 22%, EBIT 27% and EBT by 26%. Our European business showed its resilience by recording an EBITDA margin of 16.1% despite the large drop in sales and a positive PAT of INR2.4 billion. Please note that the PAT of C23 includes INR3.3 billion of profit from discontinued operations pertaining to our erstwhile forgings business in Germany. So PAT of C23 is not directly comparable to PAT of C24 in our European operations. On page 15 we have the C24 consolidated results of CIE India sales were INR86.3 billion which is a slight decline of 2% versus C23 this is largely due to the decline in our European business. The ebitda margin was 17.3% versus 17.1%. In C23 EBIT 13.4% versus 13.4% it is same and EBT 12.6% versus. Is 12.2%. The consolidated PAT in C24 is INR8.3 billion versus INR11.3 billion in C23. The C23 PAT of course includes profit from discontinued cfg operations of INR3.3 billion. Adjusting for this, PAT in C24 grew by 3.7% and this highlights the resilience in CIE’s business model despite a decline of 2% in sales. Next up is the section on balance sheet and cash flows. On page 17 you will see our abridged consolidated balance sheet which shows the healthy state of CIE India. Return on net assets is 19.8%, roughly around the 20% mark that we aspire to. Return on equity is 12.6% and ROE of continued operations is 12.5% largely due to the cash on our balance sheet. Net financial debt has further improved and is negative INR12 billion versus negative INR8.2 billion last year. The cash flows are shown on page 18. The company generated operating cash flows to the extent of 66% of consolidated EBITDA growth. Capex was INR2.1 billion concentrated mainly in India. Overall Capex was INR3.9 billion which is less than 5% of sales and represents our endeavor to control CAPEX till market starts picking up, which is in line with our norms given the strong cash generation. The board of the company has recommended an enhanced dividend payout of Rupees seven per share versus Rupees five per share made last year. Now this Rupees five per share last year was itself double the payout made in the previous two years. This of course is pending approval in the AGM schedule later in the year. This part is not in the presentation but since the approvals came yesterday we are presenting it separately. We move on to the section on strategy. The global automotive industry is throwing up risks and opportunities in ample measures as exemplified by the contrasting market trajectories of our two main markets, Europe and India. In Europe our strategy is to optimize and protect our margins as much as possible, adapting our factories to the new volume scenario in the medium term and look for additional business as supply chain consolidates. On the other hand, we continue to be optimistic about the medium and long term growth in the Indian automotive market and will continue to invest in expanding capacity in India. We are focused on improving the efficiency of our Indian plants to bring them as close as possible to the benchmarks of CIE Automotive worldwide. After an initial spurt in the last few years, the European light vehicle market witnessed a stagnation in EV penetration in 2024 at 13%. Current forecast suggests that this ratio will move up to 43% in 2029, which is down from earlier estimates of 56%. And that’s what we are referring to as a slowdown on EV penetration in Europe. Our plan is to manage this transaction. And that is by substituting production of crankshafts by aluminium forged parts and steel parts that will not be affected by transition to electric vehicles. In addition, Metal Castello has a healthy order book in electric vehicle transmission parts. Some of these orders have been delayed as the pace of growth of EVs in Europe and US slows down. In India, the transition to electric mobility is expected to increase gradually. Many exciting new EV models were launched both in four wheeler and two wheeler segments in 2024. And this should spur EV penetration in India. The exposure of our India business to internal combustion engine parts is low and the transition to EVs is more of an opportunity than a risk in India. Our EV order book in India is spread across aluminum and steel castings, steel forgings, gears, dampings and composite parts for E2 Wheeler, E3 Wheeler and E4 Wheeler segments. So again, this is very diversified our EV EV effort in India. The next few pages present market statistics and forecasts from relevant sources, followed by the results submitted to SEBI in the prescribed format. To summarize, the automotive industry is faced with significant uncertainty both in the immediate and long term. Markets are volatile. The transition to EVs is not happening as smoothly as predicted. Automotive customers are looking for more premium features and for better safety and comfortable. The supply chain is being transformed by digitization and Industry 4.0. We strive to be future ready as many new opportunities and risks emerge in this changing environment. Our approach has been to optimally balance growth, investments and returns to actively manage the uncertainties surrounding these changes. Thank you. And now we can proceed to Q and A.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on the Touchstone telephone. If you wish to withdraw yourself from the question queue, you may press Star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Ladies and gentlemen, to ask a question, please press Star and one on your phone. We’ll take our first question from the line of Amit Agisha from HG Hawaiian Company. Please go ahead.
Amit Agicha
Good afternoon, sir. Am I audible?
Operator
Amit, can you use your handset mode, please? Your voice is not clear.
Amit Agicha
I’m using my handset mode. Am I audible?
Operator
Yes, please go ahead.
Amit Agicha
Thank you for the opportunity and good afternoon to everybody. My question was connected to the current order book position. What is the current order book position and how does it compare year on year?
Vikas Sinha
Order book where? In India or Europe?
Amit Agicha
Both.
Vikas Sinha
No normally. As I said, every year we generate orders anywhere between. In 15 to 20% of our sales. So that, you know, that is like a thumb rule as far as CIE is concerned. And that kind of order book is generated every year. So we are very comfortable on order book as far as both India and Europe are concerned. Even on EV orders, they are a substantial or a significant portion. Not substantial, significant portion of our order book. Right now the issue is the conversion of order book into sales, which is taking more time than than what we thought because of the slowness in market, especially in Europe and particularly in EVs in Europe. Other than that, we are very comfortable on the order book position. You can easily take about 15% of sales as order generated every year. Ender, anything you want to add?
Ander Arenaza Alvarez
No, it’s perfect answer. In fact, in India we had about 10 billion, 10,000 billion of new orders. And out of these 10,000 billion, approximately 25% are for EVs. Okay. So we see that the EV orders are growing even in India. So I think our portfolio is balanced slowly towards the electrification. So we are quite satisfied with this evolution. So regarding the new order allocation, this year has been positive and we hope that these new orders will, let’s say, will transform into firm orders in the next years.
Amit Agicha
Thank you. Sarentha. The second question was connected to the capacity utilization of the plants across India and Europe. Are you facing any bottlenecks or idle capacities like your plan to include more capex and increase the expansion?
Ander Arenaza Alvarez
Okay. It depends on the different verticals. Okay. In certain verticals we have free capacity. Approximately we can say that we can have around 20% of average free capacity. But in certain verticals, like aluminum, we are fully booked. In this moment. We are working even Saturday, Sundays. So we are adding new machinery. We have a very strong CAPEX plan this year. We. We spend. We used our CAPEX to reinforce our position in certain, let’s say verticals. But for 2025, we will for sure have to spend much more money on CapEx because the new order books are requiring this additional CapEx. So we talk more or less about 5 to 6% of our turnover in CAPEX every year.
Amit Agicha
Thank you. So that was helpful and all the best.
Ander Arenaza Alvarez
Thank you.
Operator
Thanks so much. Thank you. Ladies and gentlemen, to ask a question, please press star N1 on your phone. Participants who wish to ask a question are requested to press Star N1 on their phone. We’ll take our next question from the line of Devang Shah from Asitsi Mehta Investment Intermediates Private Limited. Please go ahead.
Devang Shah
Hi, good afternoon sir. So I just want to get an idea the way we are seeing some kind of, you know, slowdown in India, Europe especially now auto segment. So what kind of growth trajectory as far as revenue growth is concerned? You are looking in the next, you know, two years perspective because you are somewhere, you know, able to make a. Some kind of, you know, manage your margin somewhere close to 15%. But you are neg. You are having some kind of, because of a European operation, you know, some kind of negativity. Although, you know, you try to make it out based on the industrial standard. You are trying to make some kind of outperformance but any kind of, you know, green shoot visibility is there or you can compensate that with, you know, India kind of, you know, particular the way we are seeing some kind of, you know, growth over there. So can you throw some more light as far as growth is concerned for the next two years?
Vikas Sinha
Okay, the. You. You are right that this year unfortunately the growth in India was not able to offse the drop that we had in Europe. The reality is that the drop in Europe was higher than expected especially because of the, you know, that the automotive sector is going down. There is a quite a slowdown in this sector in the four wheelers. But also at the same time this year we had a huge drop on the commercial vehicles and the off highway vehicles. The year was, let’s say during the year from first quarter to the end of the year we saw the commercial vehicles and the off highway business declining more and more.
Okay, we started with the minus 10% in the first quarter, minus 21 in the second, minus 28 in the third and finally the last quarter was minus 35%. So that is the drop of the commercial vehicles market in. In Europe and that affected us in terms of our sales. What we see in Europe in the next two three quarters. What we see is that we will. The market is still very uncertain.
The commercial vehicles are weak. They continue at this low level. The passenger car business also it seems that will remain at the current levels. So we are not very optimistic in the at least in the next 2 3/4 regarding the European market evolution then. We will probably see a revamp on the commercial vehicles that you know that this market is very cyclical so we should start looking at the let’s say the revamping the change in the trend in the commercial vehicles. And also what we expect is especially in the off highway business we expect in the second half of the year a certain revamp thanks to the different politics that are being taken by the US Government reinforcing all the oil and gas production and infrastructure plan and so on. Okay. That’s the expectation. So we can expect first half of the year a weak scenario and second half of the year we all hope that there will be a certain growth or certain revamp.
Devang Shah
But so just my question to that. You know just adding the way we are making some kind of offset by you know, Indian operations and we are seeing some kind of you know the government policy over is supportive. The you know the way recently we we have seen the Tesla is also been you know coming into an India so you know, auto incidentally player like you in which you know they are also giving some kind of emphasis to have a you know, promote through PLI and giving the localization and the way the demand environment is there. The budget has been so far, you know, announced by the government. Do you feel it will compensate your overall revenue growth and you may come come out into some kind of, you know, single digit or you know, mid single digit kind of revenue growth for a next, you know If I means 26 or 27 that can possibly. Sir.
Vikas Sinha
Yes, that that is exactly our plan. Okay. Our now we are in fact during all these weeks we are having different meetings internally in India because as expected and as explained the European market at least in the next quarters will not give us good news or at least will be very, very flat evolution. We will concentrate our growth strategy in India and we have already taken certain actions and we are speeding up let’s say the new order allocation and the ramp up of the new programs.
So we hope that yes, in the next years we will be able to offset the drop of Europe with the growth in India. Okay, that’s exactly the strategy and that’s where we are now making all our efforts. So we will reinforce the speed in India because I think we are now ready for that. You know that sometimes growing and having new projects and starting new projects is not an easy task because you need good people, you need to be trained. We need. You need the technology and you need all the management to be well aligned in this moment. I think our company is very, very solid. You saw in the evolution in the last years. You saw also in the margins that we are able to sustain and to improve every year. Year by year we are improving. We still have a lot of room for improvement in internal efficiencies. We are working on that. So I think that we are very optimistic regarding our Indian business. We will and CIA’s bet is to grow in India considering that other regions will not grow or will grow less than expected. So we need to make our best efforts here in India and that’s the target. So yes, the answer is yes, that’s our expectation to offset the drop in Europe with the growth in India.
Devang Shah
And comment on the number side sir, what kind of growth in a percentile can you say? You know some kind of, you know, mid single digit and something as far as revenue is concerned for next week.
Vikas Sinha
We don’t give guys because these are not, these are forward looking statements. But you know like what you are asking for is something that is reasonable. Let’s put it, let’s leave it at that.
Devang Shah
Understood, Understood. Answer one more thing. Margin wise we are going to maintain some kind of range. That’s what prevailing right now.
Vikas Sinha
Yes, that’s the endeavor in India. Hopefully we can increase a little bit. Of course we are trying to ramp up growth in India. We are trying to ramp up growth with our anchor customers. So you know like plus and minuses. But as Ander pointed out there is some scope for improvement in India. So the rate of improvement in India will not be the same as before. We have rapidly improved margins. That’s not, it’s not going to be as fast improvement but we do hope to improve something in India.
In Europe it all depends on the sales. You know like if, you know if the sales decline is arrested like we had 20% drop in, you know almost we had big drops in both the quarters, last quarters. So in spite of that we are still at around 15% and overall for the year around 16%. So yes, that is the kind of range bound we want to keep. Unless until of course the bottom collapses from the sales, then it is a different issue. But we don’t think that is going to happen. We do expect as Andrew pointed out two or three quarters down the line.
We do expect some improvements in trucks, improvements in off highway and we expect the cars to stabilize at this level. So I think yes, what you are talking about that range of 15% hopefully we can get better than that. But around that.
Devang Shah
Yes. Yes. Thank you so much. Thank you so much. And wishing you all the best.
Vikas Sinha
Thank you. Thank you very much.
Operator
Thank you. Before we take the next question, would like to remind participants to press star. Than one to ask a question. Next question is from the line of Apoorva from Buggle Rock. Please go ahead.
Apoorva
Hi, this is Apurva from Bugle Rock. Thank you for the opportunity and appreciate the robust performance despite what’s happening in Europe. Just I had two questions. One is on. Am I audible? Sorry. Yeah.
Vikas Sinha
Yes, yes, go ahead.
Apoorva
So just on the, you know, custom on the OEM side, any meaningful conversations apart from our anchor clients? Top three, four clients. On the passenger vehicle side, any meaningful conversations on new business opportunity if during the quarter or you know.
Vikas Sinha
No, no, of course we have. Our customer list in India is much longer than just the anchor customers. As we have pointed out in earlier conversations. I think we have at least 12 to 15 strong clients in India and we regularly interact with them. We had talked about order delays at some of the other clients. That’s the reason why we have increased our focus on anchor customers.
But all our customers are equally important to us and we are in conversation with all our customers. So yes, there are opportunities beyond anchor customers also and there are good opportunities in anchor customers. You know, Mahindra Bajaj, they have launched some very good models. So we are looking forward to that. But there are other customers also. In terms of order book, in terms of customers in India, I think we are very, we are placed very comfortably. It’s just that some of the order book has been delayed. That’s the only reason there is really. We are quite happy with the situation.
Otherwise there are always competitive pressures. If the question is are there competitive pressure? Answer is yes. And we are happy dealing with competition. It’s a competitive market. That’s the reason why we put so much stress on reliability, efficiency so that we remain the first choice for all our customers.
Apoorva
Yeah. So one is the order delay and other, where I was coming from is below the anchor customers. Any wallet share gains that we are looking for in the next one, two years. I understand this is platform business. It takes time. So that’s.
Vikas Sinha
Yes, yes. You know, there are lots of, you know, like, you know, I don’t want to be enumerating that. But beyond the anchor customers we will, you know, in fact our, you know, if you go back to the strategy that we talk about with anchor customers, we grow along with the market and our new customers give us that market plus growth, you know, as simple. If you look at the portfolio approach, this is what we do. This is how we maintain our margins also. So that approach remains. It is just that for the last few quarters we have hovered around the market because, you know, some of the new orders have delayed some of the anchor customers. You know, in every quarter one has done well, the other has not done well. Something like that has happened. So that’s the reason why. But we are very comfortable as far as all our customers are concerned. Okay. And my next question was on the inorganic front that we were targeting segment where we are don’t have that much presence and we would like a customer driven inorganic acquisition. So anything on that we are looking at.
Apoorva
I think it was a composites business.
Vikas Sinha
No, no, no. Plastics we had talked about. Plastics is already a small business. We wanted to do plastic. There are other areas that we are actively looking at. We’ll continue to look at that. Of course, you know, we are not going to do acquisitions just for growth or for. We will only do it when some of our strategic gaps are addressed. So that’s what it is. We keep looking at it. Yes, we have not done an acquisition since 2019, but we keep actively engaged on that part.
Apoorva
Sure. I mean I was more coming from that only the strategic gaps in terms of customers. So yeah,
Vikas Sinha
We have identified that. We keep looking at it.
Apoorva
Thanks for the opportunity and all the best.
Vikas Sinha
Thanks. Thank you very much.
Operator
Thank you. We’ll take our next question from the line of Pratik Kothari from Unique pms. Please go ahead.
Pratik Kothari
Yes, hi, good afternoon sir. Just a continuation to your last comment because on this delays etc across various customers because in the last two years also I believe we had done some material capex for them and that was not getting ramped up. So one, are these issues behind us or not yet?
Vikas Sinha
Pratik? They are ongoing, but largely I think if you remember and to be frank, we had expected things to be changing from Q3 of C24. Right. We had said that that did not materialize the way we had spoken about. But yes, we do expect this year will be better. I think we have, let’s say more confidence at this time when I. When we are telling you this.
Pratik Kothari
Correct. And this betterment I believe is one, the delay which happened over the last year or two and also the new orders that you have any.
Vikas Sinha
Yes. You know, the delay was with Cie Hosur customers. The delay was with some of our EV customers at, you know, at Aluminum. So there were certain specific orders that were delayed.
Pratik Kothari
My question is that is getting resolved.
Vikas Sinha
Yes. That is getting dissolved.
Pratik Kothari
Yes, correct. And then also order, booking order. For inflow this year has been strong and hence we are seeing that we need to do much more capex next year also for Indian operations.
Vikas Sinha
Yes, that’s right. That’s right.
Pratik Kothari
And because just one clarification. The CV growth that we report, I mean the market growth of -22. How do we reconcile it? Because nowhere else do we see that Indian markets MHCV is down 20%. What does this include? And it doesn’t.
Vikas Sinha
I think looking at Europe. You are looking at Europe or.
Pratik Kothari
No, no. India. India
Vikas Sinha
Q4 number yearly number
Pratik Kothari
Q4.
Vikas Sinha
Q4 go to Q. Yeah. Minus 20. This is, this is. No, no. You, you know that minus 22.2. That that you are looking at is year on year drop for drugs.
Pratik Kothari
Yes, correct. But any. I mean if you look at. I know this is IHS but if you look at CM FADA. I mean things are between minus 2 to plus 2. I mean because we benchmark ourselves to this numbers which we report when we say the industry growth and how about that,
Vikas Sinha
I think you know like LCVs, how they are treated. It depends on that because if you include LCVs in the tract data then it becomes different because LCVs are included in the 6 ton. 6 ton data in. In the way we present it. Okay. So that, that will account for the difference.
Pratik Kothari
Correct. Okay. So one ended on Europe. So metal Castello. Has it gotten worse? I mean I think last quarter we were at 4 million a month. So where are we there?
Ander Arenaza Alvarez
We are still at about 4 million euros per month. Okay. That’s the, the current level. We don’t expect to go down that level and we expect to recover and to increase this figure by the second half of this calendar year. We think that as you know we are producing mainly gears for the off highway vehicles used mainly for big infrastructure, oil and gas applications. And we all expect that these businesses will revamp in the US in the next months. So let’s say that we are still very low at this 4 million per month. That is very low figure for us. And we expect to recover in the second half of the year.
Pratik Kothari
Correct. Great. Thank you. All the best, sir.
Ander Arenaza Alvarez
Thank you.
Vikas Sinha
Thank you.
Operator
Thank you. We’ll take our next question from the line of Manit Agisha from HG Hawaiian Company. Please go ahead.
Amit Agicha
Thank you. For the follow up sir. And audible.
Vikas Sinha
Yeah please Amit, go ahead.
Amit Agicha
Yes sir. What is the total number of employees across India and Europe and are there any other hiring or workforce restructuring plan?
Vikas Sinha
Europe and India are completely different, actually. Yeah. So on, on India you are saying hiring plan in India or whatever. What, what are you talking.
Amit Agicha
Yes,
Vikas Sinha
No, hi. We are focused on efficiency, Amit. So to that extent, whatever is required for doing that, we do that. As far as Europe is concerned, we are trying, we told you, we are trying to adjust our cost to the new, to the lower volumes. You have to understand that the average, you know, size of light vehicle production in Europe used to be around 20 million.
Now the average size is anywhere between 16 to 17 million. So the market itself, and it is expected that this 16 to 17 million production will be for the next two, three years. You know, so the market itself has shrunk roughly average 20 million to 17 million. So we have to adjust ourselves to this reality, which is what we are doing. Exact numbers, I think we’ll have to check and provide.
But in Europe we are trying to adjust the cost. In India we are focused on efficiency. That includes automation, that includes routing, that includes layouts. So a whole lot of things. So it’s not that we require to do some special hiring or anything like that.
Ander Arenaza Alvarez
Just for your understanding, in India we are about 12,600 employees. That is the total amount of Indian employees. And we don’t expect to grow this figure as we expect to grow the business with increasing our internal efficiency. And in Europe we are a little bit more than 900 people. Okay. That’s the amount, the amount of people do we have in four genes plus metal Castello. We have reduced all these figures from the previous year, adapting to the new condition of the market. And that’s what we are now fighting.
I mean, we need to adapt the company, the manpower to the reality of the business.
Amit Agicha
One last question was connected to the material price structures like the steel. I mean all the input cost, are they affecting the margins and if the how much?
Ander Arenaza Alvarez
No, there has not been almost any relevant change. Less than 1% of impact on the sales. So very minimal impact.
Vikas Sinha
Not this quarter. Not too much in Q3 either. I think, you know, frankly, they are largely stable, actually trending down, but largely stable. The prices, the commodity prices. So pass through the overall EBITDA is not impacted. But since he talked margins, so he was not on sale from margin.
Ander Arenaza Alvarez
So margins don’t get impacted.
Amit Agicha
Okay, so thank. That was helpful. And that’s it for myself.
Vikas Sinha
Yeah. Thanks, Amit. Thank you.
Operator
Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone. We’ll take our next question from the line of Nishant Chauhan from Goji. Please go ahead.
Nishant Chauhan
Hi, sir. Am I audible?
Vikas Sinha
Yes. Please, Nishant, go ahead.
Nishant Chauhan
Yeah, so this is just one question with reference to Your slide number 14, wherein we’re talking about the European full year performance. So over there we mentioned the MHC. We declined to be around 25.9%. But if I reconcile with some other industry body Data such as ACE or something like that, they report something around 5 to 6% decline. So could you just help me understand. Are these the production figures or what could be the possible difference between the data?
Vikas Sinha
These are production data, number one. And it does not include Russia. So there are two caveats here. You have to check. One, this is production data. I think RCR data is more sales data. So that.
Nishant Chauhan
Yeah, that is registration data.
Vikas Sinha
So IHS provides both, I think. Will you please check IHS sales data? Then what’s the drop? Because we present production data and Russia. So we can reconcile it for you, Nishant. No problem. You know, you can quickly and I’ll get it reconciled. No problem.
Nishant Chauhan
Okay. And so any inventory issues? Or I mean, any comments on that, that other invents, are they sitting on high levels of inventory in Europe or is it like normalized at this point? No, especially in mhcv.
Vikas Sinha
No, you’re talking of mhc. MHCV is inventory in the European supply chain. We’ll get it checked, Nishant. No worries. You know. You know, let. Let us examine RCR data, IHS data, and I’ll. I’ll get back to you. Hey, Koda. No problem. You can contact me. You have my contact details. You can contact me. We will get this resolved.
Nishant Chauhan
Sure. Sure, sir. No problem. Okay, sir. Thank you.
Vikas Sinha
Thank you.
Operator
Ladies and gentlemen. To ask a question, please press star N1 on your phone. Yes, Sales. Sales year. Welcome. As there are no further questions, I now hand the conference over to management for closing comments. Over to you, sir.
Ander Arenaza Alvarez
Okay. So I would like to thank you everybody for participating in this. In this call. Thank you for your comments and your trust on our company. As you can see, our company continues performing solidly. Despite the, let’s say, tough situation in regions like Europe. But we think that we are doing our job properly and in the. Future, we will continue showing good results and a very solid financial performance. So I would like, as always, thank you to all my team because the great job they have done in all these tough times. And I hope that we will see you in the future with better figures and better results. Thank you very much, everybody.
Operator
Thank you. On behalf of ICICI Securities. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.
Vikas Sinha
Yes, thanks. Thanks so much.
Ander Arenaza Alvarez
Thank you.