Ceat sales and earnings bolstered by "strong" OE demand

Mumbai, India – Ceat Ltd has reported a 5.5% year-on-year increase in revenue for the second quarter of its fiscal year 2024, supported by “stable demand”.

Sales for the three months to 30 Sept came in at Rs,3043 crore (€347 million), as earnings (EBITDA) margin jumped to 15.1%, from 7.0% a year ago.

Earnings more than doubled to Rs461.8 crore during the period, from Rs203.8 crore reported for the second quarter in 2022, added Ceat's 16 Oct announcement.

For its fiscal first half, the Indian tire maker reported earnings up 125% year-on-year at Rs846.4 crore, on 4.8% higher sales of nearly Rs5,989 crore.

Second quarter sales, Ceat noted, were driven by “strong OEM demand" and inventory moves as India prepared for the festive season running September to January.

Replacement and export volumes remained stable, despite “adverse seasonality”, the Mumbai-based tire maker added.

Overall, compared to last year, OEM demand continued to have a “healthy run” while exports remain “on recovery path”, continued Ceat.

“We are witnessing mid-single-digit growth in our topline across all three segments – replacement, OEMs, and international business,” explained Arnab Banerjee, MD & CEO.

The company’s focus, he added, is on product-mix and “judicious pricing”, which helped improve margins during the second quarter.

In addition, Ceat noted an 11.5% decrease in raw material costs, which helped push up margins during the three-month period.

According to CFO Kumar Subbiah, this marked Ceat's fifth consecutive quarter of improved margins, achieved through enhanced cost efficiencies and product-mix.