Ceat Q3 Results Review — Price Hikes Continues, Margins Accretion Likely; Yes Securities Reiterates 'Buy'

Ceat has guided a high single digit volume growth in FY25, fueled mainly by healthy demand in the replacement and export markets..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Yes Securities Report.Ceat Ltd. Q3cFY25 were steady as revenues/Ebitda were in-line while adjusted profit after tax miss was led by higher interest and depreciation. Ebitda margins were slightly weak at 10.3% (estimate 10.7%, -380 bp YoY/ -70bp QoQ) led by raw material basket inflation of ~1.2% in QoQ. Overall volumes grew by ~8% with double digit growth in the replacement and exports segments. Despite the recent decline in natural rubber prices, raw material basket inflation to likely be flat or go-up by 1% QoQ in Q4 FY25E. This was partially offset by aggrieve price hikes of ~1-1.5% in truck-bus radial (versus 2% in 2Q and ~2.4% for commerical vehicle in Q1), PCR by ~4% (versus 3.5% in Q2 and 2.5-2.8% in Q1), with follow-up price hikes expected in Jan’25. While full benefit of OEM indexation (3-4%) and exports/replacement price hikes to play out in Q4 FY25E. Ceat has guided a high singledigit volume growth in FY25, fueled mainly by healthy demand in the replacement and export markets. To factor in higher-than-expected interest and depreciation, we cut FY27 consolidated EPS by ~1%. Going forward, focus on high margin segments such as exports rampup (~19% of sales) and OHT to aid volumes and margins. Valuations at18.8x/13.7x (versus 10 year long period average of ~18.6x) seem reasonable and are yet to reflect the improved positioning. Reiterate ‘Add’ with target price at Rs 3,607 (SoTP)..Click on the attachment to read the full report:.Ceat Q3 Results: Profit Nearly Halves Even As Revenue Rises 11%.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Ceat Q3 Results Review — Price Hikes Continues, Margins Accretion Likely; Yes Securities Reiterates 'Buy'

Going forward, focus on high margin segments such as exports rampup, and off-highway tyres to aid volumes and margins, says Yes Securities.

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