CEAT Q2-Results FY 24

CEAT Limited, formerly known as Cavi Elettrici e Affini Torino, is an Indian multinational tire manufacturing company under the ownership of the RPG Group. Let’s have an overlook of CEAT Q2 results FY 24.

CEAT Q2 FY24 Key Highlights (Consolidated, YoY)

• Revenue increased by 5.5%, reaching Rs 3053 crore.
• EBITDA stood at Rs 456.1 crore, up from Rs 417.6 crore.
• Operating margin significantly improved to 15.12% from 7.04%.
• Net profit saw a remarkable growth by 2556%, totaling Rs 207 crore, compared to Rs 6.4 crore in the previous year.

Additional Read: Q2 Results Dashboard

Consolidated Financial Performance of CEAT

1. Revenue: 

• Rs. 3,053 crore
• QoQ (Quarter over Quarter) Growth: +4.0%
• YoY (Year over Year) Growth: +5.5%

2. QoQ Volume Growth:

• Driven by strong OEM demand for festive inventory

3. Replacement and Export Volumes:

• Stable despite adverse seasonality

4. YoY Performance:

• OEM (Original Equipment Manufacturer) segment continues a healthy run
• Exports are on a recovery path
• Steady growth in the replacement segment

5. Realisations:

• Similar QoQ
• Price adjustments due to indexation in OEM compared to the last year

Additional Read: CEAT Share Price

Consolidated Financial Performance

• EBITDA margin: 15.1%
• QoQ improvement: +202 bps (Basis Points)
• YoY improvement: +808 bps
• Gross margin expansion: +227 bps QoQ, driven by product mix
• Increase in employee cost attributed to annual increment cycle
• YoY margin improvement due to reduced raw material (RM) costs and favourable mix

Debt and Capital Expenditure

• Total Debt: Rs. 1,890 crore
• Debt-to-Equity (D/E) Ratio: 0.5x
• Debt-to-EBITDA Ratio: 1.3x
• Capital Expenditure (Capex) for the quarter: Approximately Rs. 170 crore
• Working capital remained stable compared to Q1 FY24
• Healthy cash generation led to a sequential debt reduction of approximately Rs. 100 crore
• Leverage ratios showed improvement both QoQ and YoY

Consolidated Net Profit: 

CEAT reported a remarkable 2556% year-on-year growth in net profit, reaching ₹208 crore in Q2 FY24 compared to ₹6.4 crore in the same quarter of the previous fiscal year.

Revenue and EBITDA: 

The company’s revenue from operations in Q2FY24 reached ₹3,053.3 crore, marking a 5.5% year-on-year increase. The EBITDA stood at ₹461.8 crore, signifying a 126.6% increase from Q2 FY23.

Margin Improvement: 

CEAT achieved an EBITDA margin of 15.1%, indicating an 808 basis points year-on-year increase and a 202 basis points quarter-on-quarter growth.

Stock Performance: 

CEAT’s shares have demonstrated an upward trajectory, rising from ₹1,574 apiece to their current market position of ₹2,197 apiece, resulting in a return of nearly 35% in the current year on the BSE. 

The strong performance was primarily driven by lower raw material costs and healthy volume growth. CEAT remains optimistic about the future, with plans to focus on specialty tires, including those for electric vehicles and specialty farm tires.

CEAT Ltd’s Overall Financial Performance

• On October 16, CEAT Ltd announced a remarkable YoY surge of 2,556%, with their consolidated net profit reaching ₹208 crore in the second quarter ending on September 30, 2023. 
• This impressive growth was fueled by an increase in sales and a reduction in expenses.
• In the same quarter last year, the company had posted a net profit of ₹6.4 crore, according to a regulatory filing.
• During the first quarter of this fiscal year, CEAT reported a net profit of ₹144 crore.
• The EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation) for the second quarter of this fiscal year was ₹456.1 crore, compared to ₹203.1 crore in the corresponding period in the previous fiscal year.
• The EBITDA margin for the reporting quarter stood at 14.9%, a significant improvement from 7% in the corresponding period of the previous fiscal year.

Standalone Financials

• On a standalone basis, CEAT’s revenue was ₹3,043.23 crore.
• The EBITDA margin for standalone operations was 15%, representing an expansion of 180 basis points (bps) compared to Q1 FY23-24.
• Net profit on a standalone basis stood at ₹199 crore.

List of Entities Included in Unaudited Consolidated Financial Results

S.NO	NAME OF COMPONENTS	RELATIONSHIP
1	CEAT Limited	Holding Company
2	Associated CEAT Holding Company (Pvt) Ltd.	Subsidiary
3	CEAT AKKHAN Limited	Subsidiary
4	Rado Tyres Limited	Subsidiary
5	CEAT Speciality Tires INC	Subsidiary
6	CEAT Speciality Tyres BV	Subsidiary
7	CEAT Auto Components Limited	Subsidiary
8	Taabi Mobility Limited	Subsidiary
9	TYRESNMORE Online Pvt. Limited	Subsidiary*
10	CEAT Kelani Holding (Pvt.) Limited	Joint Venture
11	Associated CEAT (Pvt.) Limited	Joint Venture
12	CEAT Kelani International Tyres (Pvt.) Ltd.	Joint Venture

About CEAT 

Founded in 1924 in Turin, Italy, CEAT has a global presence and is a prolific producer of more than 165 million tires annually. The company manufactures tires for a wide range of vehicles, including passenger cars, two-wheelers, trucks, buses, light commercial vehicles, earth-movers, forklifts, tractors, trailers, and auto-rickshaws. CEAT’s tire plants currently have a combined capacity exceeding 800 tonnes per day.

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Sources–

https://www.valueresearchonline.com/downloads/stock-announcement/5932CE58-FF8C-4BAE-9BA1-71FC16DD0766/

https://www.bseindia.com/xml-data/corpfiling/AttachLive/4b7effd8-8436-444b-a474-9aeefaaca2ec.pdf

https://www.bseindia.com/stock-share-price/ceat-ltd/ceatltd/500878/