New Delhi, Jan 20 (PTI) Shares of CEAT Ltd pared its initial losses and settled in the positive territory on Thursday as the stock witnessed strong buying interest from market participants.
The stock slumped to a 52-week low of Rs 1,051.30 on BSE, registering a fall of 7.24 per cent over its previous close. However, the stock soon recovered the lost ground and closed at Rs 1,140.70, up 0.64 per cent.
During the trading session, the stock also witnessed an intra-day high of Rs 1,161.00 on BSE.
On Wednesday, CEAT reported a consolidated net loss of Rs 20 crore for the December 2021 quarter, due to muted demand. The company had posted a net profit of Rs 132 crore in the third quarter of 2020-21.
Its revenue from operations, however, rose to Rs 2,413 crore during the third quarter as against Rs 2,221 crore in the year-ago period, CEAT Ltd said in a regulatory filing on Wednesday.
“CEAT 3QFY22 was operationally weak largely due to weak demand and lower gross margins. However, CEAT is a play on healthy replacement/OE outlook going forward as supply chain normalizes, timely capacity addition and focus on market share gains in high margin segments like 2Ws, PCR and OHT ( around 60 per cent mix over next 4-5 years),” YES Securities said in a research note.
“We are witnessing muted demand in the replacement segment due to tepid consumer sentiment, higher fuel prices and a softer uptick in India’s rural markets. The ongoing semiconductor shortages continue to impact OEM (original equipment manufacturer) passenger segment sales,” CEAT Managing Director Anant Goenka said.
The firm’s margins continue to be under pressure due to rising commodity prices that have begun to taper down towards the end of the third quarter, he said.
“We are taking necessary corrective actions to cut costs and are looking at appropriate price increases going forward,” Goenka said. PTI DRR RUJ RUJ
