CEAT rallies over 5% in weak market on 5-fold jump in Q4 net

The tyre-maker reported 420.7 per cent surge in Q4 net profit to Rs 132.42 crore for the quarter ended March 2023 as against Rs 25.43 crore in the year ago period.

Shares of CEAT rallied over 5.5 per cent to a high of Rs 1,748 in intra-day trade on Friday after the tyre-maker reported over 5-fold jump in Q4 net profit.

At 12:10 PM, the stock quoted at Rs 1,724, still up over 4 per cent in an otherwise weak market. The S&P BSE Sensex was down 0.8 per cent at 61,249.

The stock has rallied over 26 per cent since the end of February 2023 as against a 5.5 per cent rally on the benchmark indices.

CEAT reported 420.7 per cent surge in Q4 net profit on Thursday for the quarter ended March 2023 at Rs 132.42 crore when compared with Rs 25.43 crore in the corresponding quarter a year ago. Total income rose 10.9 per cent year-on-year YoY to Rs 2,877.21 crore. The company's board also declared a divided of Rs 12 per share.

For the fiscal year FY23, net profit zoomed 279.7 per cent to Rs 206.27 crore from Rs 54.33 crore in FY22. Total income increased by almost 21 per cent to Rs 11,263.26 crore.

Commenting on the results, Kumar Subbiah, CFO of CEAT 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 cashflow, it has helped us reduce our debt by approximately Rs. 250 crore in the quarter, supported by improved operational

performance and reduction in overall inventories. Drop in raw material prices and maintaining product realization helped in the expansion of gross margins and EBITDA margins by 422 bps during the quarter. The actual overall capex for the year was close to Rs. 900 crore in line with our plan that we managed to largely fund through internal

accruals."

Earlier in April, CARE Ratings had reaffirmed its CARE AA; Stable outlook on the company's long-term bank facilities and CARE A1+ outlook on the company's short-term bank facilities.