CEAT Limited Q3 Results: ₹ 181 Cr Profit After Tax

Key Highlights of CEAT Limited Q3 Results:

• The company reported a total revenue of Rs. 11,315 crores, indicating a significant financial turnover during that period.
• The EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) stood at 8.7%, reflecting a healthy profitability margin.
• The debt-to-equity ratio was 0.6x, indicating a relatively moderate level of debt compared to equity, suggesting a balanced financial structure.
• Demonstrated robust year-over-year (YoY) growth with substantial increases in both replacement and Original Equipment Manufacturer (OEM) segments. Exports also exhibited a positive recovery trend.
• The quarter experienced a seasonal dip compared to Q2, primarily attributed to a decline in OEM volumes.
• Realisations were affected compared to the previous year due to price adjustments in both OEM and export channels.
• The revenue for the period stands at Rs. 2,963 Crores, reflecting a 3.0% quarter-over-quarter (QoQ) decrease but marking an impressive 8.7% year-over-year (YoY) growth.

Additional Read: Q3 Results Dashboard

Consolidated Financial Performance:

• The EBITDA margin stands at 14.4%, experiencing a slight 76 basis points (bps) decrease quarter-over-quarter (QoQ), but demonstrating a notable 588 bps increase year-over-year (YoY).
• Gross margins were impacted by rising raw material costs and a mix impact, mitigated by lower advertisement expenses and cost optimization measures, reducing the overall impact on gross margin contraction.
• The year-over-year margin improvement was driven by a reduction in raw material costs and operational efficiencies, with a quarterly capital expenditure of approximately Rs. 215 Crores.
• Working capital levels remained consistent with Q2 FY24, indicating stability in this financial aspect.
• The company exhibited healthy cash generation, resulting in a sequential debt reduction of approximately Rs. 160 Crores.
• Leverage ratios showed improvement both QoQ and YoY, with a total debt of Rs. 1,729 Crores, a debt-to-equity ratio (D/E) of 0.4x, and a debt-to-EBITDA ratio of 1.05x.

ESG (Environmental, Social, and Governance) Highlights:

• Approximately 35% of the plant’s power is sourced from renewable energy, emphasising a commitment to sustainable energy practices.
• There’s been a commendable 5.5% reduction in water consumption per metric ton of production, underlining efforts towards efficient water management.
• About 24% of natural rubber is sourced using alternate transport methods, contributing to a lower environmental footprint.
• Select SKUs (Stock Keeping Units) have witnessed up to a 10% reduction in rolling resistance, showcasing advancements in product sustainability.
• The sustainability vision entails a targeted 50% reduction in the carbon footprint by 2030, aligning with long-term environmental goals.

Key Social Initiatives:

• Over 500 farmers have undergone training in organic and regenerative cultivation practices, promoting sustainable and environmentally friendly agriculture.
• Preparation and distribution of 29,000+ seed balls for tree plantation initiatives have been carried out in cooperative endeavours.
• Approximately 5,500 teachers have been impacted through teacher training programs, contributing to educational development.
• Around 3.8 lakh individuals have availed services through rural health clinics, emphasising social responsibility and healthcare accessibility.

Additional information:

1. Scope 1, 2, and select Scope 3 reduction for April to December FY24 compared to the same period in FY23, further influenced by a revision in thermal emission factors.

2. As of the end of Q3 FY24, there has been a notable 13% reduction in overall tCO2e (total carbon dioxide equivalent) per metric ton of production.

Consolidated: Summary P&L

All figures in Rs. Cr

Parameter	Q3 FY24	Q2 FY24	Q3 FY23	QoQ	YoY	9M FY24	9M FY23	YoY
Net Revenue from operations	2,963.1	3,053.3	2,727.2	-3.0%	8.7%	8,951.6	8,440.1	6.1%
Raw Material	1738.5	1,729.8	1,785.2	0.5%	-2.6%	5,197.9	5,663.5	-8.2%
Gross margin	1,224.6	1,323.6	942.1	-7.5%	30.0%	3,753.8	2,776.6	35.2%
Gross margin %	41.3%	43.3%	34.5%	(202) bps	679 bps	41.9%	32.9%	904 bps
Employee Cost	217.2	217.7	181.8	-0.2%	19.4%	630.4	521.4	20.9%
Other Expenses	589.9	649.8	522.6	-9.2%	12.9%	1,862.7	1,649.2	12.9%
EBITDA	425.7	461.8	231.4	-7.8%	83.9%	1,272.1	606.5	109.7%
EBITDA %	14.4%	15.1%	8.5%	(76) bps	588 bps	14.2%	7.2%	702 bps
Finance Cost	65.6	71.7	65.7	-8.6%	-0.2%	207.4	175.5	18.2%
Depreciation	127.3	124.5	117.5	2.3%	8.4%	372.8	344.0	8.4%
Operating PBT	232.8	265.5	48.2	-12.3%	382.4%	691.9	87.0	695.4%
Exceptional expenses	0.0	0.0	0.5	NM	NM	0.0	24.9	NM
Non-Operating income	2.9	10.5	2.0	-71.9%	45.5%	16.7	14.6	14.5%
PBT	235.7	276.0	49.8	-14.6%	373.1%	708.6	76.7	824.1%
PAT	181.3	207.7	34.8	-12.7%	420.2%	533.0	50.0	966.7%

Notes: 

Figures are as per IND AS 

Company’s investment in Sri Lanka JV is accounted using Equity method under IND AS which was earlier consolidated using proportionate consolidation method Gross margin includes impact of non-material cost movement of inventory (FG + SFG)

EBITDA includes profit from Sri Lanka JV EBITDA does not include Non-operating income

Additional Check: CEAT Share Price

About CAT Limited

CEAT Ltd (www.ceat.com), established in 1958 as the flagship company of RPG Enterprises, is a prominent Indian tire manufacturer with a global presence. Producing over 41 million high-performance tires, CEAT serves diverse segments including 2-3 Wheelers, Passenger and Utility Vehicles, Commercial Vehicles, and Off-Highway Vehicles.

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Sources https://www.bseindia.com/xml-data/corpfiling/AttachLive/3254e0e4-01a1-4e33-9b9c-6e4be1f82ace.pdf

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