Ceat - Digital Initiatives Key To Drives Efficiencies: Yes Securities

Yes Securities Report

We interacted with the management of Ceat Ltd. alongside our visit to its Tamil Nadu (TV) plant. While Tamil Nadu plant contributes less than 10% of revenues, the purpose of the visit to dwell more into digital and automation aiding cost controls and manufacturing efficiencies.

Key takeaways from interactions are-

1. Revenue growth expected to be single digits in FY25 supported by growth across the original equipment manufacturer, replacement, and exports.

2. Ceat is enhancing focus on electric vehicle tyres with platform-wins in two-wheeler, passenger vehicle and commercial vehicle segments.

3. raw material cost is expected to be flat QoQ for Q4 FY24E however, recent volatility in NR and crude can influence margins in Q1 FY25E.

4. Tamil Nadu plant to see TBR capacity expansion over 12-18 months.

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