India's CEAT Q1 profit beats estimates, tyremaker sees demand rising

JK Tyre & Industries

18/07/2024 14:24

BENGALURU, July 18 (Reuters) - Indian tyremaker CEAT  CEAT.NS  beat first-quarter profit estimates on
Thursday, as price hikes coupled with healthy demand in the replacement market helped outweigh higher rubber
costs.
    CEAT's profit increased 6.6% to 1.54 billion rupees for the April-June quarter, beating analysts' expectation
of 1.52 billion rupees, according to LSEG data.
    Revenue rose 8.8% to 31.93 billion rupees, marking the biggest rise in nearly three years, per LSEG.
    For further earnings highlights, click  nFWN3JA1KW 
        
  
        KEY CONTEXT
    CEAT is the first of its peers to report results for the April-June period in which car makers' sales to
dealers grew at their slowest pace in at least two years. Still, while the likes of Maruti Suzuki  MRTI.NS  sold
fewer cars to dealers, two-wheeler makers, including Hero MotoCorp  HROM.NS , clocked a nearly 21% sales growth.
    Moreover, healthy demand in the tyre replacement market ahead of the monsoon season was expected to soften the
blow of higher rubber prices for tyremakers, analysts said.
    CEAT plans to front-load capital expenditure this year "to ensure we are well-prepared to meet rising demand,"
CEO Arnab Banerjee said in a press release.
    
    PEER COMPARISON
                                 Estimates     Analy                                  
                                  (next 12     sts'                                   
                                  months)      senti                                  
                                               ment                                   
               Tic  PE   EV/E  Revenue  Profi  Mean   # of  Stock to price target**   Div yield (%)
               ker       BITD  growth   t      ratin  anal                            
                         A     (%)      growt  g*     ysts                            
                                        h (%)                                         
 CEAT Ltd                                                                          
 MRF Ltd                                                                            
 Apollo Tyres                                                                      
 JK Tyre &                                                                         
 * The mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading
above the PT
    
    APRIL-JUNE STOCK PERFORMANCE
    


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CEAT vs Peers    https://tmsnrt.rs/4fbQzIv
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 (Reporting by Nandan Mandayam in Bengaluru; Editing by Savio D'Souza)
 ((Nandan.Mandayam@thomsonreuters.com; Mobile: +91 9591011727;))