Ceat lifts profits in Q2 FY23-24

Ceat Limited has reported consolidated revenue of Rs 30.53 billion (£301.1 million, US$366.8 million) for the three months ending on 30 September 2023, the second quarter of its 2023-24 financial year. This result reflects a 5.5 per cent year-on-year rise in revenue. The Q2 FY23-24 EBITDA margin was 15.1 per cent, up 202 bps on the prior quarter and 808 bps year-on-year. Net profit amounted to Rs 2.08 billion (£20.5 million, $25.0 million), an amount 44.2 per cent higher than the prior quarter and an eye-watering 3125.5 per cent increase year-on-year.

“The demand continues to be stable, and we are witnessing mid-single-digit growth in our topline across all three segments – replacement, OEMs, and international business. Our focus on product mix and judicious pricing helped improve margins during the quarter,” comments Arnab Banerjee, managing director and chief executive officer of Ceat Limited.

On a standalone basis, the company’s revenue stood at Rs 30.43 billion (£300.1 million, $365.6 million) and EBITDA margin stood at 15.0 per cent, an expansion of 180 bps vs Q1 FY23-24. Net profit amounted to Rs 1.99 billion (£19.6 million, $23.9 million).

“For the fifth quarter in succession, we have improved our margins quarter-on-quarter,” states Kumar Subbiah, chief financial officer of Ceat Limited. “Our consistent efforts in improving cost efficiencies and mix are yielding benefits. EBITDA margin has crossed Rs 400 crore (Rs 4 billion) the first time in a quarter leading to healthy improvement in our net profits. We have also managed to bring our standalone debt down by ~Rs. 103 crore (~Rs 1.03 billion) through efficient management of cash flows and improved operating performance.”