Ceat Q4 Review - Raw Material Headwinds, Unfavourable Mix Dent Margins: Prabhudas Lilladher

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Prabhudas Lilladher Report

Ceat Ltd.’s Q4 FY21 consolidated results missed our estimates, as margin came lower at 11.4% (down 130 basis point YoY/ 340 basis point QoQ, our estimate 13.4%) led by raw material headwinds and lower replacement mix.

As gross margins are anticipated to remain weak in H1 due to raw material inflation (up 8-10% increase in Q1) and weaker mix (replacement share to normalize to ~60% versus 65% in H2), we expect margins to remain weak in Q1 FY22.

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