In This Article:
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Revenue Growth: 11.6% YoY growth in value and 7.9% growth in volume.
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Standalone Profit: INR 96 crores for Q3 FY25.
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Turnover: INR 3,292 crores for the quarter.
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International Business Growth: Double-digit growth YoY, particularly strong in Europe.
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Replacement Market Growth: Double-digit growth in commercial vehicle segment.
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Capacity Utilization: 75% to 80%, with some plants exceeding 80%.
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EBITDA Margin: 10.5% for the quarter, a contraction of 387 basis points YoY.
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Gross Margin: 36.9%, a contraction of 450 basis points YoY.
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CapEx: INR 250 crores for Q3, with a full-year guidance of INR 1,050 crores.
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Debt: Reduced by INR 50 crores to INR 1,835 crores.
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Net Profit: INR 97 crores for the quarter.
Release Date: January 16, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Ceat Ltd (BOM:500878) reported a strong revenue growth of 11.6% year-over-year and a volume growth of 7.9% for Q3 FY25.
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The international business segment showed double-digit growth, particularly in Europe, with significant contributions from the passenger and 23-wheeler categories.
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The company achieved high utilization rates in its plants, with some reaching up to 95%, indicating efficient operations.
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Ceat Ltd (BOM:500878) is focusing on strategic growth areas such as electrification, international business expansion, and premiumization, which are expected to drive future growth.
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The company maintained a healthy debt-to-equity ratio of 0.43 and generated strong operating cash flow, reducing its debt by INR50 crores during the quarter.
Negative Points
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Ceat Ltd (BOM:500878) faced a contraction in operating margins due to increased raw material costs, which were not fully passed on to customers.
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The gross margin for the quarter contracted by 450 basis points year-over-year, primarily due to higher raw material prices.
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The company experienced a decline in consolidated profit after tax, which stood at INR97 crores compared to INR181 crores in the same period last year.
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Interest expenses increased due to higher average debt levels and rising bank rates, impacting overall financial performance.
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Geopolitical conflicts and currency depreciation in certain international markets, such as Brazil, posed challenges to the company's growth in those regions.
Q & A Highlights
Q: Can you clarify the capacity expansion plans for CEAT, specifically the 20,000 per day increase? A: Yes, we have taken an enabling approval for this expansion. The focus is on ramping up our international business, particularly with the integration of Camso, which will increase our international turnover significantly. (Arnab Banerjee, CEO)