Here's why Mahindra CIE shares zoomed over 18% today

Shares of auto component firm Mahindra CIE Automotive Limited zoomed over 18 per cent to hit an intraday high of Rs 234.80 on BSE after the company posted its earnings for the quarter ended March 2022.

The company posted a consolidated net profit of Rs 161.42 crore for the first quarter ended March. It had reported a consolidated net profit of Rs 10.09 crore in the year-ago period.

Revenue from operations rose to Rs 2,588.36 crore for the first quarter as compared with Rs 2,189.4 crore in the January-March period of last year. The company follows a January-December financial year.

The stock has been gaining for the last two trading sessions. With a market capitalisation of more than Rs 8,600 crore, the shares stand higher than 5 day, 20 day, 50 day and 100 day moving averages but lower than 200 day moving averages.

The company in its investor presentation said that the strong growth was strong mainly due to the steel price increase. Also, EBITDA margins were affected negatively by energy price increases and general inflation. The market environment in Europe is difficult due to energy cost hikes exacerbated by the Ukrainian conflict, it added.

The board of the Pune-based firm also recommended a final dividend of Rs 2.5 per share of Rs 10 each for the financial year ended December 31, 2021.

According to MarketsMojo, the stock is trading at a discount compared to its average historical valuations and it has a Very Attractive valuation. Also, the company has a strong ability to service debt as the company has a low Debt to EBITDA ratio.