CEAT, one of India’s largest tire producers, recorded big gains in early trading on Tuesday, with its shares jumping more than 10% to an all-time high of $2,337 per share. This remarkable uptick was attributable to the company’s outstanding performance in the September quarter, which outperformed market forecasts.
The company disclosed its Q2FY24 data after market hours on Monday, with its consolidated net profit increasing by 3125% year on year to 207 crore in the second quarter, up from 6.4 crore in the previous fiscal year. Lower raw material prices and excellent volume growth were credited for the strong performance.
The previous June quarter (Q1FY24) saw a combined net profit of 144 crore. Notably, the cost of raw materials consumed in Q2 FY24 was lowered to Rs. 1,729.8 crore from Rs. 1,953.3 crore in the same period the previous year.
Furthermore, revenue from operations in Q2FY24 reached 3,053.3 crore, representing a 5.5% year-on-year growth over the previous fiscal’s comparable period, which had registered 2,894.5 crore.
CEAT also recorded an EBITDA of 461.8 crore in Q2, representing a 126.6% increase over the 203.8 crore reported in Q2 FY23. The EBITDA margin for Q2FY24 was 15.1%, an increase of 808 basis points (bps) year on year and 202 bps quarter on quarter.
CEAT shares opened with a 10.37% gap-up at 2,320 apiece in response to Q2FY24 performance, compared to the previous closing price of 2,101.95. They continued to rise, hitting an all-time high of 2,337, representing a 10.76% increase.
CEAT’s shares have risen from 1,644 apiece to their current market position of 2,249 apiece in the current year, resulting in an almost 38% gain. The stock has gained 65.72% in the last two years, and 126% and 97% in the last three and five years, respectively.
CEAT, founded in 1958, is one of India’s leading tyre companies and the flagship company of the RPG Group. According to their website, CEAT manufactures over 41 million high-performance tyres for diverse markets such as 2-3 wheelers, passenger and utility vehicles, commercial vehicles, and off-highway vehicles.
