Last Updated: October 17, 2023, 11:20 IST
Shares of CEAT Limited zoomed 11 per cent intraday to hit day’s high of Rs 2,642 on the NSE after the Indian tyre maker reported a sharp rise in second-quarter profit which beat estimates, as strong sales and lower expenses boosted margins.
In the quarter, consolidated total revenue stood at Rs 3,053.3 crore, marking a growth of 5 per cent against Rs 2,894.5 crore during the same period last year, the company said in an exchange filing on October 16.
The company’s total quarterly expenses decreased by 2.5 per cent, primarily driven by a notable 14 per cent reduction in input costs.
At the operating level, the EBITDA for the second quarter of this fiscal was Rs 456.1 crore, an increase from the Rs 203.1 crore reported in the same period of the previous fiscal.
The EBITDA margin for the reporting quarter was 15 per cent, as compared to the 7 per cent margin recorded in the corresponding period of the previous fiscal. EBITDA is earnings before interest, tax, depreciation, and amortization.
Mumbai-based CEAT is the first to report results among major tyre makers, which are expected to see some benefit from cooling raw material costs.
Replacement demand – which for CEAT formed 53 per cent annual sales – and steady sales of passenger and commercial vehicles are expected to help overall industry volumes grow 6 per cent to 8 per cent for the financial year 2024, Crisil Ratings had said in a note last month.
“The demand continues to be stable, and we are witnessing mid-single-digit growth in our topline across all three segments – replacement, OEMs, and international business. Our focus on product mix and judicious pricing helped improve margins during the quarter,” said CEAT Chief Executive Officer, Arnab Banerjee.
As a result of Ceat’s strong results, most of its peers like JK Tyre, MRF and Apollo Tyres are also trading with gains of as much as 11 per cent in Tuesday’s session.
In fact, shares of JK Tyre and MRF are trading at their respective record highs.
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