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

The Economic Times - - Smart -

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.

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