Ceat Posts Remarkable Figures For Q2FY14
DSIJ Intelligence / 29 Oct 2013
Ceat has posted remarkable numbers for September 2013 quarter. Both the topline and bottomline of the company moved up as there has been rise in demand in passenger cars which in turn has helped tyre manufacturers like Ceat.
Ceat has posted wonderful results for the September 2013 quarter. The topline of the company increased by 9% to Rs 1263 crore in Q2FY14 as compared to Rs 1164 crore in Q2FY13 .The bottomline of the company witnessed a significant growth as it rose from Rs 3.81 crore in Q2FY13 to Rs 76.55 crore in Q2FY14.
The total expenses of the company rose marginally by 1.6% to Rs 1177 crore as purchase of stock in trade, raw material cost, employee cost and other expenditures rose by 87% ,4%, 15%,1 9% respectively on YoY basis.
Company witnessed increase in its EBITDA from Rs 88 crore in Q2FY13 to Rs 179 crore in Q2FY14 while its EBITDA margin surge by 638 basis points to 13.60% on YoY basis. The finance cost for the company has declined by 5% to Rs 48 crore in Q2FY14 from Rs 50 crore in same quarter previous year.
To add on, company was able to post such amazing results for the quarter as its exceptional items which consist of Voluntary Retirement Scheme and Provision for warranty has declined to nil in Q2FY14 as compared to same duration previous year.
As there has been rise in the demand of passenger cars in India, the company has announced to expand its production at its Halol plant in Gujarat. As per the expansion plan, Ceat would be investing Rs 650 crore to improve its radial tyre unit from 115 TPD(tonne per day) to 120 TPD.
As per the annual report of March 2013 of the company, OEM (Original equipment manufacturers) has registered the growth of 37% even though the industry’s performance remained flattish. Moreover, another reason for such remarkable performance by the company during the quarter is the price for rubber such as RSS-4 category has declined from Rs 18100 per 100 kg in July 2013 to Rs 17100 per 100 kg in September 2013 which would have helped Ceat in improving its Net margin.
On YTD basis stock of the company has surged by 61% to Rs 170.8 with TTM price to earnings ratio of 2.6 x. From past few years passenger car segment in the Indian market has shown astonishing performance which in turn has helped tyre manufacturing firms like Ceat to increase its revenue. Hence, considering all this, one can expect the stock of the company to do well at this juncture.
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