CEAT shares jump 11% on multifold growth in profit in Q2; JK Tyres, MRF hit 52-week highs

Shares of tyre maker CEAT saw surge in buying on Tuesday, a day after the company reported a 32% growth in its profit for the July-September quarter. The profit jumped to ₹207.72 crore in the September quarter, as against ₹8 crore in the same period last year.

Cheering the news, CEAT shares surged as much as 11.06% to hit an intraday high of ₹2,333.90 apiece on the BSE. Notably, the share price of its peers JK Tyres and MRF Tyres were up, rising as much as 5.06% and 9% to hit their 52-week highs of ₹344 and ₹1,13,379.10, respectively.

Early today, CEAT shares opened at ₹2,311.60 crore, up 10% as against the closing price of the previous session at ₹2,311.60. At the time of reporting, the share price of the tyre maker was trading 4.36% higher at ₹2,193. At present, the share price of the company is trading 16.9% lower than the 52-week high of ₹2,640, which the company touched on July 10 this year. The share price of the company is trading 61.9% higher than the 52-week low of ₹1,357.60, which the company touched on March 20 this year.

During the session, the market capitalisation of the company stood at ₹8,869.49 with more than 1.57 shares exchanging hands on the BSE, as against the two-week average of 7,992 shares.

In the September quarter, the company's revenue from operations stood at ₹3,053.32 crore, up 5.4% year-on-year (YoY), as against ₹2,894.48 crore in the same period last year.

“The demand continues to be stable, and we are witnessing mid-single-digit growth in our topline across all three segments – replacement, OEMs, and international business. Our focus on product mix and judicious pricing helped improve margins during the quarter,” says Arnab Banerjee, MD & CEO, CEAT Limited. 

“For the fifth quarter in succession, we have improved our margins quarter-on-quarter. Our consistent efforts in improving cost efficiencies and mix are yielding benefits. EBITDA Margin has crossed ₹400 crore for the first time in a quarter leading to healthy improvement in our net profits. We have also managed to bring our standalone debt down by ~₹103 crore through efficient management of cash flows and improved operating performance,” says Kumar Subbiah, CFO, CEAT Ltd.

On a standalone basis, the company’s revenue stood at ₹3,043.23 crore, up 5.4% YoY, as against ₹2,886.37 crore in the same period last year. The company’s standalone net profit stood at ₹199 crore. During the quarter under review, the company’s EBITDA (earnings before interest, tax, depreciation and amortisation) margin stood at 15.0%, witnessing an expansion of 180bps (basis points) as against 13.11% in the Q1 of FY24.

Established in 1958, CEAT produces more than 41 million tyres, catering to various segments like two-wheelers, three-wheelers, passenger and utility vehicles, commercial vehicles and off-highway vehicles.