CEAT

Ceat posted a three times jump in its consolidated net profit at Rs.67 crore on a net sales of Rs.1428 crore, up from Rs.1239 crore (YoY). This is very good performance given the challenging times in the automobile sector, with volumes for Ceat rising 9% sequentially and 16% (yoY) and this was led by new OEM partnerships like Royal Enfield, Volvo-Eicher and Bajaj Auto.

QoQ raw material costs have risen 221 bps and this pushed down the EBITDA down by 7% (QoQ) at Rs.154 crore and EBITDA margins fell 178 bps to 11.1%. Raw material prices rose not on account of rubber, which infact during the quarter was down 9% but primarily due to increase in carbon black and tyre fabric prices. Looking ahead, prices are expected to remain stable and in 2014 till date, rubber prices have come down 7% and the same growth momentum is expected to continue over the next few quarters. It is robust exports, especially for passenger vehicles segment which will help the company maintain its margins and keep the growth in sales at over 10%.