CEAT reports more than anticipated decline in gross margins sequentially
News: CEAT reported muted performance for Q1FY23 with gross margin decline on standalone basis for the quarter stood at massive 160 bps QoQ with consequent EBITDA margins placed at 5.9%, down 133 bps QoQ. Net sales for the quarter stood at ₹ 2,803 crore, up 8.8% QoQ with EBITDA placed at ₹ 164.2 crore, down 11.4% QoQ. PAT for the quarter stood at ~₹ 2.5 crore down ~81% QoQ.
Views: Gross margin decline for the quarter came in on higher side, indicating subdued performance for Q1FY23 at its peers including Apollo Tyres and JK tyres in our coverage universe. We had built in ~70 bps gross margin decline & 120 bps EBITDA margin decline on QoQ basis for Apollo Tyres on standalone basis for Q1FY23.
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