Ceat falls 6% second day in a row on disappointing Q1 results

Ceat has dipped 6% to Rs 587, extending its Tuesday’s 6% fall, after reporting 21% year on year decline in consolidated net profit at Rs 52 crore for the quarter ended June 30, 2014 (Q1), first time in past two years. The tyre maker had profit of Rs 65 crore in the same quarter last year.

EBITDA or operating profit margin declined 208 basis points to 9.7% from 12.26%. The management said that margins were hit due to rise in employee cost, higher ad spends and adverse product mix.

Net sales, however, rose 10% to Rs 1,453 crore during the quarter under review against Rs 1,317 crore in the year-ago period.
 

The stock opened at Rs 600 and touched a low of Rs 580 on National Stock Exchange. The counter has seen huge trading activity with a combined 1.2 million shares changing hands till noon deals on NSE and BSE.

Meanwhile, the stock had saw a dream run, rallied more than seven-fold in less than one year. The stock hit a record high of Rs 731 in June 2014, surged 645% from its 52-week low of Rs 98 touched in August last year.