CEAT shares surge over 10% to all-time high after Q2FY24 earnings beat market estimates

CEAT, one of India's major tyre manufacturers, made significant strides during early trading on Tuesday, with its shares surging over 10% to reach an all-time high of ₹2,337 apiece. This remarkable upswing was attributed to the company's impressive performance in the September quarter, which exceeded market expectations.

The company released its Q2FY24 numbers after market hours on Monday, with its consolidated net profit growing by 3125% YoY to ₹207 crore in the second quarter as compared to a net profit of ₹6.4 crore in the corresponding quarter of the last fiscal year. This strong performance was attributed to lower raw material costs and healthy volume growth.

In the preceding June quarter (Q1FY24), the company recorded a consolidated net profit of ₹144 crore. Notably, the cost of raw materials consumed in Q2 FY24 came in lower at ₹1,729.8 crore compared to the previous year's figure of ₹1,953.3 crore for the same quarter.

Furthermore, the revenue from operations in Q2FY24 reached ₹3,053.3 crore, reflecting a 5.5% year-on-year increase from the previous fiscal's similar quarter, which had recorded ₹2,894.5 crore.

CEAT also reported an EBITDA of ₹461.8 crore in Q2, signifying a 126.6% increase from the ₹203.8 crore reported in Q2 FY23. The EBITDA margin for Q2FY24 stood at 15.1%, indicating an 808 basis points (bps) year-on-year increase and a 202 (bps) quarter-on-quarter growth.

In response to Q2FY24 performance, CEAT shares exhibited a strong start to Tuesday's session, opening with a 10.37% gap-up at ₹2,320 apiece compared to the previous closing price of ₹2,101.95. They continued to strengthen, reaching an all-time high of ₹2,337, marking a 10.76% increase.

In the current year so far, CEAT's shares have demonstrated an upward trajectory, rising from ₹1,644 apiece to their current market position of ₹2,249 apiece, resulting in a return of nearly 38%. Over the last two years, the shares have gained 65.72%, and in the last three and five-year periods, they rallied 126% and 97%, respectively.

Founded in 1958, CEAT is one of India’s leading tyre brands and the flagship company of the RPG Group. CEAT produces more than 41 million high-performance tyres, catering to various segments like 2-3 wheelers, passenger and utility vehicles, commercial vehicles, and off-highway vehicles, its website shows.

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