CEAT

The company had surprised the market with its numbers for Q4FY13. Analysts had expected that given the poor performance of the auto sector, its performance might get impacted. But thanks to the fall in the rubber prices, its main raw material which comprises 40% of the total cost, the company was able to post a smart improvement in margins and profits. Ceat's consolidated revenue rose over 5% at Rs 1,346 crore. There was a 6% growth in volumes and 3% growth can be attributed to the product mix. Increase in Original Equipment (OE) market and new alliance with the Eicher group for supply of tyres to Volvo-Eicher commercial vehicles and Enfield bikes also improved the numbers.  It ended the quarter with a consolidated net profit at Rs.65 crore, up 33% (YoY).

Its market share in the 2-wheeler segment rose 500 bps to 19% on a YoY. Though volumes rose, cost of raw material remained flat. Its raw material cost to sales fell from 75% in FY12 to 69% in FY13. And this helped its EBIDTA growth by a healthy 300 bps to 9%. The company has ended the year on a high note, with consolidated net revenue rising over 8% at Rs.5052 crore and net profit rose over six times at Rs.120 crore. The company has also been able to bring down its debt by Rs 273 crore to Rs 1,038 crore. The company has no plans to hike rates any time in the immediate future.