India's Mahindra CIE reports 73% rise in Q1 profit on robust domestic, European demand

BENGALURU (Reuters) - Indian auto components supplier Mahindra CIE Automotive Ltd reported a nearly 73% surge in first-quarter profit on Tuesday, boosted by strong domestic and European demand.

A subsidiary of Spain's CIE Automotive, Mahindra CIE's consolidated profit was at 2.79 billion Indian rupees ($34.06 million) in the quarter ended March 31, up from 1.61 billion rupees a year ago.

Lower commodity costs and pent-up demand supported sales in the Indian auto industry for the year. Pre-buying of vehicles ahead of the implementation of new fuel emission norms from April 1, and strong demand during the festival season also drove sales.

European business of the Mumbai-based company outperformed Indian business by 5.8%. Europe, a key market of the company, clocked revenue at 15.53 billion rupees for the quarter, constituting nearly 51.4% of total revenue.

The revenue from the India segment rose 13.3% to 14.68 billion rupees.

The automotive company, which counts Maruti, Tata- Jaguar Land Rover (JLR) and Renault among its customers, reported revenue at 24.4 billion rupees in the first quarter, up from 20.61 billion rupees a year earlier, while expenses jumped 16.7%

Meanwhile, Mahindra & Mahindra, the second biggest stakeholder in the Mahindra CIE, sold over 6% stake in Mahindra CIE Automotive last month, bringing its stake in the company to 3.19% from 9.25%.

Shares of Mahindra CIE have risen 4.3% in 2023 versus a 3.2% drop in the Nifty 500 index. The stock closed 1.4% lower on the day ahead of the results.

($1 = 81.9200 Indian rupees)

(This story has been corrected to say the company reported Q1, not Q4 results, in paragraphs 1, 6 and the headline)

(Reporting by Yagnoseni Das in Bengaluru)