Ceat Shares Shredded Over 5% After Release of Q2 FY25 Results

On October 17, 2024, Ceat Ltd., a member of the RPG Group, announced its financial results for the quarter ending September 30, 2024 (Q2 FY25).

Consolidated revenue reached ₹3,304.5 crore, with an EBITDA margin of 11.1%, reflecting a contraction of 102 basis points compared to Q1 FY24-25. The net profit was ₹121.5 crore.

Ceat experienced strong year-over-year volume growth in both its replacement and international business segments. The international segment showed solid recovery, with year-over-year growth, although it faced a slight decline on a quarter-over-quarter basis. The OEM segment also saw healthy quarter-over-quarter volume growth driven by robust demand for festive inventory. Overall realisations improved both quarter-over-quarter and year-over-year, supported by the replacement and OEM segments.

On a standalone basis, revenue was ₹3,298.1 crore, with an EBITDA margin of 11.1%, reflecting a contraction of 93 basis points from Q1 FY24-25. Net profit stood at ₹136.5 crore.

Capex and Debt

Capital expenditure for the quarter amounted to approximately ₹208 crore. Debt increased by ₹238 crore due to higher working capital requirements compared to Q1 FY25 and the payment of dividends. Leverage ratios remained stable quarter-over-quarter and improved year-over-year.

Commenting on the results as well as the outlook of the business, Mr Arnab Banerjee, MD & CEO, CEAT Limited said, “We are pleased to see that we have successfully carried the momentum from Q1 through Q2. This quarter marks our highest revenue ever, driven largely by robust performances in our Replacement and International sectors. While there’s a significant increase in commodity prices, our margins were impacted during the quarter. We took selective price increases during the quarter that offset part of the cost impact. The revenue outlook remains positive as we enter Q3.”

Mr Kumar Subbiah, CFO of CEAT Limited, said, “Our standalone revenue of ₹3,298 crores during the quarter was the highest that we have achieved so far, supported by double-digit growth in Replacement & International businesses. We partially mitigated the impact of a steep increase in the prices of natural rubber through judicious price increases and cost efficiencies. This quarter also saw our overall debt level rise by ₹280 crore, driven in part by increased raw material inventory, necessitated due to an increase in transit period on imports and the distribution of dividend in Sept to the tune of ₹ 120 crore.” 

On October 18, 2024, Ceat Ltd shares opened at ₹2,800.00 and touched the day low of ₹2,725.70 at 09:30 AM, reflecting a fall of 5.50% from the previous close of 2,889.30. 

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