- CEAT Ltd's Q3 consolidated net profit rose 60% to Rs 156 crore year-on-year
- Revenue increased 26% to Rs 4,157 crore, surpassing Bloomberg estimates
- EBITDA grew 65.3% to Rs 563 crore with margin expansion to 13.6%
CEAT Ltd., a leading domestic tyre manufacturer, reported a significant rise in net profit in the third quarter of the current financial year, even though it missed street expectations due to a one-off labour cost.
Consolidated net profit jumped 60% to Rs 156 crore in the October-December period, compared to Rs 97 crore in the corresponding quarter last year, according to a stock exchange filing on Monday. Analysts' consensus estimate compiled by Bloomberg projected Rs 178 crore.
The bottomline took a hit from a one-time provision of Rs 58 crore due to the implementation of the new labour codes introduced by the government during the quarter.
Strong topline growth drove operating leverage leading to improvement in margins. Stable commodity prices also helped in sustaining gross margins.
CEAT Q3 Results (Consolidated, YoY)
- Revenue up 26% at Rs 4,157 crore versus Rs 3,300 crore (Bloomberg estimate: Rs 3,971 crore)
- Ebitda up 65.3% at Rs 563 crore versus Rs 341 crore (Bloomberg estimate: Rs 506 crore)
- Margin at 13.6% versus 10.3% (Bloomberg estimate: 12.8%)
- Profit up 60.4% at Rs 156 crore versus Rs 97 crore (Bloomberg estimate: Rs 178 crore)
The reduction in GST rates in late September have improved sentiments in domestic market, said Managing Director and CEO Arnab Banerjee. "We have had some opportunities opening up in international markets as well. We expect the positive momentum to sustain in the coming quarter and help us close the year strongly," he said in a statement.
CEAT maintained capex to support growth during the quarter, largely funded by internal accruals and debt sustaining at previous quarter level, said Chief Financial Officer Kumar Subbiah.
The company also approved an investment of Rs 1,314 crore for capacity expansion at plants in Tamil Nadu which is expected by the second quarter of FY28. The capex will be funded by way of mix of internal accruals and debt.
"The company expects good growth in short to medium term in PCUV Category. This investment is intended to add capacity progressively, to service the anticipated future demand," a statement said.
Shares of CEAT settled 2.3% higher at Rs 3,881.55 on the BSE, compared to a 0.4% decline in the benchmark Sensex. The stock is up 29% on a 12-month basis.
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