Turnaround Pays Off, Lifts Mahindra CIE’s Bottomline
Co wants to increase its margins closer to 15%, and is exploring incremental revenue streams such as defence
200 bps. The firm expects 11-12% margins in 2017.
Metalcastello has reported lower volumes. So, the company is exploring various means for an incremental revenue stream such as defence sector.
The revenue growth of the Indian business is expected to improve since its key customer M&M has reported encouraging response to new car launches. In addition, new products such as gear carrier, bearing carrier, transmission and engine gear package, balancer shaft and turbo-manifold castings will bring incremental revenue at superior margins. The key to profitability improvement in the Indian businesses is higher capacity utilisation, which is currently at 65%.
Analysts expect a turnaround from the March 2016 quarter in the form of strong earnings growth.