Ceat hits 20% upper circuit as raw material prices soften

Shares of hit a 52-week high and touched their 20 per cent upper circuit at Rs 1,661 on Thursday after strong management commentary on multiple parameters such as demand for the products, softening the prices of raw materials and capacity expansions.

Ceat is looking to narrow the gap in Ebitda margin vs its peers over the next five years. The company aims to recover its Ebitda margin to at least 10-12 per cent vs 6 per cent in Q1FY23 and 7.6 per cent in FY22. The company is also looking to raise prices by 1-1.5 per cent in the next month.

Ceat's Sri Lanka operations are still profitable as the margin is intact, but the volumes are down.

The stock surged over 75 per cent in the last 3 months and has risen nearly 23 per cent in the last month.

For the quarter ended June 30, the company reported consolidated net sales of Rs 2,818.38 crore, up 47.83 per cent from the year-ago quarter's net sales of Rs 1,906.39 crore. The company reported a net profit of Rs 8.68 crore for the latest quarter.

In August, the company's COO Arnab Banerjee said that CEAT plans to expand its tyre sales network in places with a population of 5,000-10,000 via its FMCG style of distribution, aiming to double outlets to 1 lakh in two to three years.


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