Last updated: Oct 17, 2023 11:20 IST
Shares of CEAT Limited rose 11 percent intraday to hit a day’s high of Rs 2,642 on the NSE after the Indian tire maker reported a sharp rise in second-quarter profit that beat expectations as strong sales and lower costs boosted margins.
In the quarter, consolidated total revenue stood at Rs 3,053.3 crore, a growth of 5 percent from Rs 2,894.5 crore in the same period last year, the company said in a stock exchange filing on October 16.
The company’s total quarterly costs fell 2.5 percent, mainly due to a notable 14 percent reduction in input costs.
At the operational level, EBITDA for the second quarter of this fiscal stood at Rs 456.1 crore, up from Rs 203.1 crore reported in the same period of the previous fiscal.
The EBITDA margin for the reporting quarter stood at 15 percent, compared to the 7 percent margin recorded in the corresponding period of the previous fiscal. EBITDA is earnings before interest, taxes, depreciation and amortization.
Mumbai-based CEAT is the first to report results among major tire makers, which are expected to see some benefit from the reduction in raw material costs.
Replacement demand – which represented 53 percent of annual sales for CEAT – and steady sales of passenger and commercial vehicles are expected to help overall industry volumes grow by 6 percent to 8 percent in financial year 2024, Crisil said Ratings in a final note. month.
“Demand remains stable and we are witnessing mid-single digit growth in our sales across all three segments: replacement, OEMs and international operations. Our focus on product mix and judicious pricing helped improve margins during the quarter,” said CEAT Chief Executive Officer, Arnab Banerjee.
Reflecting Ceat’s strong performance, most of its peers such as JK Tire, MRF and Apollo Tires are also trading with gains of as much as 11 percent during Tuesday’s session.
In fact, JK Tire and MRF shares are trading at their respective all-time highs.
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