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Ceat Q3 Results Review - Positives Priced In: Dolat Capital

Increase in market share for PCR, TBR segment, expanding capacity in high margin off-highway tyre segment and revival in two-wheeler volume are key positives for business

<div class="paragraphs"><p>Close view of a mechanic holding a tyre. (Source: freepik)</p></div>
Close view of a mechanic holding a tyre. (Source: freepik)

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Dolat Capital Report

Ceat Ltd. printed strong set of numbers in Q3. Revenue grew 9% YoY. Volume grew 12.5% YoY, led by international business (grew at 25%), and replacement growth continues to be healthy while original equipment manufacturer was tad lower.

For Q3, the raw material basket (Carbon black, synthetic fibre and natural rubber) increased by 2.5% -Going ahead raw material basket to be stable and range bound in Q4. Average selling price is stable except for exports.

Expect export and replacement demand to improve QoQ. Management expects Q4 to be better than Q3 (lean quarter). Off-highway tyre volume continues to increase with ramp up in production capacity.

Ceat's debt reduced to Rs 17.92 billion (versus Rs 18.9 billion in Q2 FY24) led by strong free cash flow generation.

For FY24, total capex to be Rs 8 billion (the growth capex is Rs 5 billion for Ambernath expansion and truck-bus radial tyre capacity expansion).

Click on the attachment to read the full report:

Dolat Capital Ceat Q3FY24 Result Update.pdf
Opinion
Ceat Q3 Results: Profit Quintuples, Approves Capex Plan Of Rs 572 Crore

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