Despite a 417% and 8% growth in net profit and sales, respectively, in Q3FY24, one of the leading tyre manufacturers’ shares fell by 3%, on Thursday.
With a market capitalization of Rs 11,386.50 crore, the shares of CEAT Ltd were trading at Rs 2,814.95 per share, decreasing around 2.12 percent as compared to the previous closing price of Rs 2,875.95 apiece.
Looking into the company’s Performance, CEAT Ltd’s revenue decreased by 2 percent on a quarter-on-quarter basis from Rs. 3,053 crores in Q2FY24 to Rs. 2,963 crores in Q3 FY24. Further, revenue increased by 8 percent year on year from Rs. 2,727 crores in Q3FY23 to Rs.2,963 crores in Q3FY24.
CEAT Ltd’s net profit decreased by 12 percent on a quarter-on-quarte basis from Rs.208 crore in Q2FY24 to Rs. 181 crore in Q3FY24. Further, net profit increased by 417 percent yearly from Rs. 35 crore in Q3FY23 to Rs.181 crore in Q3FY24.
The company’s capex for the quarter was Rs. 215 Cr, with strong cash production resulting in a debt reduction of Rs. 160 Cr sequentially. Ceat Working capital maintained at comparable levels as in Q2 FY24, and leverage ratios increased both quarterly and year over year.
CEAT, a renowned tyre company, caters to the EV environment in India. CEAT is a dominant brand in the two-wheeler EV OEM area, accounting for over 50% of the market.
CEAT invests much in research and development to reduce tyre rolling resistance. Projects were started in PCR, TBR, and 2W segments to reduce rolling resistance. CEAT achieved low rolling resistance for its projects throughout the year, with the TBR sector having the lowest rolling resistance (5.0 in block tyre and 4.55 in RIB tyre).
In FY 2022-23, CEAT spent around Rs 900 Crores on CAPEX, primarily financed by internal accruals. Approximately Rs 750 crores were spent on project CAPEX, with the remaining Rs 150-175 crores allocated for maintenance CAPEX.
CEAT Limited is an India-based tyre manufacturer. The Company’s primary activity is the manufacture of car tyres, tubes, and flaps. The company produces tyres for a wide variety of vehicles, including two- and three-wheelers, passenger and utility vehicles, commercial vehicles, and off-road vehicles.
Written by:- Abhishek singh
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