CEAT slumps over 10% in two sessions

CEAT fell 4.70% to Rs 597 at 10:45 IST on BSE, extending Tuesday's 5.84% fall triggered by weak Q1 June 2014 results.

The company announced the result during trading hours on Tuesday, 22 July 2014. Shares of CEAT fell 5.84% to Rs 626.45 on that day. The stock has fallen 10.27% in two sessions from Rs 665.30 on 21 July 2014.

Meanwhile, the BSE Sensex was up 92.25 points, or 0.35%, to 26,118.05.

On BSE, so far 1.84 lakh shares were traded in the counter, compared with an average volume of 2.12 lakh shares in the past one quarter.

The stock hit a high of Rs 608.80 and a low of Rs 587.40 so far during the day. The stock hit a record high of Rs 731 on 25 June 2014. The stock hit a 52-week low of Rs 97.50 on 28 August 2013.

The stock had outperformed the market over the past one month till 22 July 2014, rising 7.04% compared with 3.67% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 61.25% as against Sensex's 14.36% rise.

The small-cap company has an equity capital of Rs 35.96 crore. Face value per share is Rs 10.

On a consolidated basis, CEAT's net profit fell 20.9% to Rs 51.66 crore on 10.3% rise in net sales to Rs 1453.10 crore in Q1 June 2014 over Q1 June 2013.

Mr. Anant Goenka, Managing Director, CEAT said, "The first quarter has been positive for CEAT with a strong volume growth of 11%. We are beginning to see a postive change in passenger and commercial segments, although it is too early to count on gains."

Elaborating on the company's performance, Chief Financial Officer-Group, Subba Rao Amarthaluru, said, "It was business as usual for us in Q1 June 2014. We successfully managed to lower our debt levels. Our Debt/Equity currently stands at a healthy 1:1. The impact of this exercise was evident as the interest costs went down by Rs 4 crore."

On what impacted the margins, Amarthaluru pointed out, "Our people's cost has gone up owing to inflationary trends and so have our ad spends. This has hit our margins."

CEAT's total expenditure rose 13.4% to Rs 1325.20 crore in Q1 June 2014 over Q1 June 2013. The company's employee expenses rose 22.2% to Rs 86.43 crore in Q1 June 2014 over Q1 June 2013.

CEAT, the flagship company of RPG Enterprises, is one of India's leading tyre manufacturers and has strong presence in global markets, and has a capacity of over 700 tonnes per day.

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