Ceat showing good traction

Ceat seems to have hit some good traction today. The stock price is currently up almost 3% at Rs.1078 and this is after an intra day rise of around 4% during the opening session. Its 52-week high stands at Rs.1318.30.

The stock is in the limelight today morning, reacting to its announcement made today morning. The company stated that it has formed an exclusive partnership with Italy based Pirelli’s for distributing its gobal range of premium motorcycle tyres in the Indian markets. This is a sole partnership of Pirelli for India and Ceat will benefit by adding on this high-end and high quality international product.

For Pirelli it’s a win-win as it will be able to leverage CEAT's vast distribution and dealer network pan India. Using Ceat’s network, Pirelli will offer its entire gamut of motorcycle tyres.

Ceat had ended Q2FY16 on a very encouraging  note with consolidated net profit rising 30% (YoY) at Rs.107 crore though revenue had come down 2% at Rs.1400 crore.

Raw material cost was down 5% and total costs declined over 4%. This helped push up the EBITDA by 15%. The 37% decline in interest costs also helped boost the bottomline despite the lower topline.