CEAT Ltd share Price Today

CEAT, part of RPG group is one of the India’s most reputable tyre manufacturers established in 1958. It has prominent presence in India as well as in key international markets with 7 manufacturing plants & 51,000+ sales touchpoints.

• FY22 Channel Mix: Auto OEMs: 24%; Replacement: 56%; Exports: 20%  
• FY22 Segment Mix: PV: 18%; CV: 40%; Farm & OHT: 14%; 2W: 28%
• It is presently operating at ~80% capacity utilization levels
• It has ~4,600+ dealers, 380+ CEAT exclusives, presence in >110 countries

• Domestically, company is witnessing healthy demand traction from the OEM’s front with replacement demand being steady in nature. Robust demand is particularly being witnesses in the PV space with chip supply issue easing while steady MoM improvement is seen in the CV space
• On the exports front, demand in Europe & Indonesia is muted amid negative economic scenario. Sri-Lanka on the other hand is witnessing 50-60% decline in volumes with CEAT earning steady margins (unchanged).
• On Margins front company expects Q2FY23 to be on similar lines as Q1FY23 with recovery seen from Q3FY22 onwards. Overall company aims to achieve ~10%-12% operating margins over medium term. Replacement market business remains more lucrative in terms of margin than the OEM.
• Over past 3 years’ company has expensed ~₹3,300 crores out of planned ~₹4,000 capex w.r.t capacity building across Chennai and Ambernath plant. Capex for FY23E is planned at ~₹900 crores while the same for FY24E is seen at ~₹ 700 crore, with peak revenue potential pegged at ₹13,000 crore.
• Company remains committed towards keeping Debt/EBITDA at <3x.

Auto Tyres & Rubber Products company Ceat announced Q3FY24 results:

• On a consolidated basis, revenue closed at Rs 2,963.1 crore, EBITDA margin stood at 14.4%, a contraction of 76 bps vs Q2FY24. Net profit stood at Rs 181.3 crore.
• On a standalone basis, revenue stood at Rs 2,949.0 crore and EBITDA margin stood at 14.1%, a contraction of 89 bps vs Q2FY24. Net profit stood at Rs 176.7 crore.

Commenting on the results as well as the outlook of the business, Arnab Banerjee, MD & CEO, CEAT, said, “Replacement and International business reflected strong growth on YoY basis. While margins for the quarter were healthy, we witnessed a marginal drop primarily on account of an increase in input cost. With stronger growth in premium segments in the domestic market and recovery in international markets, we expect stronger growth in the forthcoming quarters”.

Kumar Subbiah, CFO, CEAT, said, “Our consistent efforts in improving cost efficiencies and mix are yielding benefits as we ended another quarter with strong operating margins. Our continuous focus on generating healthy cash flows has helped us to fund capex from internal accruals and also in the reduction of gross debt in the quarter by Rs 163 crore. Our Balance Sheet and leverage ratios have strengthened further during the quarter”.

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