Ceat skids 6% after reporting 41% decline in Q2 net profit; Details here

Ceat reported a decline of 41.4 per cent in consolidated net profit, at Rs 121.88 crore for the September quarter, compared to Rs 208 crore, a year ago

Ceat's share price slipped 5.6 per cent in trade on Friday, October 18, and logged an intraday low of Rs 2,725.7 per share on BSE. The selling pressure in the stock came after the company reported a 41 per cent year-on-year decline in its Q2FY25 net profit.

At around 9:22 AM, Ceat shares were down 5.34 per cent at Rs 2,735 per share on the BSE. In comparison, the BSE Sensex was down 0.57 per cent at 80,543.59 around the same time. The market capitalisation of the company around the same time stood at Rs 11,079.48 crore. 

The tyre company reported a consolidated net profit of Rs 121.88 crore for the September quarter, compared to Rs 208 crore a year ago. 

Meanwhile, the company's revenue came in at Rs 3,304.53 crore, up 8.23 per cent Y-o-Y compared to Rs 3,053.3 crore a year-ago. Sequentially, revenue from operations grew by 3.49 per cent, whereas PAT fell by 20.94 per cent.

The revenue from operations grew owning to a strong performance in the replacement and international sectors.

“This quarter marks our highest revenue ever, driven largely by robust performances in our Replacement and International sectors. While there’s a significant increase in commodity prices, our margins got impacted during the quarter,” said Arnab Banerjee, MD & CEO, Ceat.

Meanwhile, the company rolled out selective price increases during the quarter that offset a part of the cost impact caused by higher rubber prices. The company remains optimistic about performance for the third quarter.

“This quarter we partially mitigated the impact of a steep increase in the prices of natural rubber through judicious price increases and cost efficiencies. This quarter also saw our overall debt level rise by Rs 280 crore, driven in part by increased raw material inventory, necessitated due to an increase in transit period on imports and the distribution of dividend in September to the tune of Rs 120 crore,” said Kumar Subbiah, CFO, Ceat.

In the past one year, Ceat shares have gained 32.2 per cent, compared to the BSE Sensex's rise of 23 per cent during the same period.