Shares of CEAT, one of the largest tyre manufacturers, surged over 5% during Friday's intraday trade and hit a four-month high, after the company's March quarter earnings beat market expectations.
During the trade, the stock opened positively at ₹1,698 apiece and continued to climb to hit an intraday high of ₹1,748.80, up by 5.61%.
At 11:00 a.m., the stock was trading at ₹1,718.60, a gain of 3.83%.
The company on Thursday reported impressive numbers for the March quarter, with its consolidated net profit growing by 428% YoY to Rs132 crore as compared to a net profit of ₹25 crore in the corresponding quarter of the last fiscal year. This strong performance was attributed to lower raw material costs.
Total expenses came in higher at ₹2,698.88 crore in Q4 as against ₹2,570.66 crore in the year-ago period. However, the cost of raw materials consumed was lower at ₹1,661.18 crore as compared to ₹1,768.47 crore a year ago.
The revenue from operations surged to ₹2,875 crore in Q4FY23, compared to ₹2,592 crore in a similar quarter last fiscal. It reported an operating profit of ₹368 crore in Q4, an increase of 95.74% when compared to ₹188 crore in the preceding December quarter, while the EBITDA margin came in at 13% in Q4, up 600 basis points (bps) YoY and 400 (bps) QoQ.
The company recorded a consolidated revenue of Rs. 11,315 crore, EBITDA of ₹982 crore, and profit after tax of ₹182 crore for the full fiscal year FY22–23. Further, the board of directors has approved a dividend payment of 12 per share for FY22–23.
Commenting on the Q4 performance, Mr Kumar Subbiah, CFO of CEAT Limited, said, “We are pleased to share that our margins have expanded, and we are back to double-digit margins in the quarter. As part of our continuous effort to bring efficiencies in cash flow, it has helped us reduce our debt by approximately Rs. 250 crore in the quarter, supported by improved operational performance and a reduction in overall inventories.”
Over the past year, the company's shares have been on an upward trend, increasing from ₹1,091 apiece to the present market position of ₹1,718 apiece, resulting in a return of approximately 57.50%.
Founded in 1958, CEAT is one of India’s leading tyre brands and the flagship company of the RPG Group. CEAT produces more than 41 million high-performance tyres, catering to various segments like 2-3 wheelers, passenger and utility vehicles, commercial vehicles, and off-highway vehicles, its website shows.
18 analysts polled by MintGenie on an average have a 'hold' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.