This Smallcap stock, which deals in the business of manufacturing tyres, a part of the RPG Group, surged upto 6 percent after management guided double-digit growth in FY25 & FY26.
Share Price Movement
In Thursday’s trading session, Ceat (NSE:CEAT)‘s share price touched a day’s high of Rs. 2,894.25 which was up by 5.66 percent. The stock reiterated from the day’s high and was trading at Rs. 2,802.55 which is 2.31 percent higher than the previous closing price of Rs. 2,739.15 apiece.
In the past year, the stock has given around 13 percent returns, and compared to the Nifty Index, Ceat has outperformed.
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What happened
Ceat stock is in focus after the Company’s CEO, Arnab Banerjee in an interview with CNBC said that they have launched three tyres with new technology that are targeted towards the premium end market. The size of the premium segment is expected to grow to the ~25 percent level.
The current market share of CEAT in the premium segment is ~16 percent and is expected to be in 16 to 20 percent. The passenger segment is facing slow growth but two-wheelers have been steady. They expect to grow in double digits in FY25 & FY26.
Further, they are 5 percent away from their comfortable gross margins of 40 to 41 percent. They are getting good market access in Europe and are growing in the US as well.
Financials
In its latest filing for the quarter ending December 2024, the company reported an 11.3 percent rise in revenue, reaching Rs. 3,300 crore compared to Rs. 2,963 crore in Q3FY24. During the same period, net profit declined by 46.40 percent from Rs. 181 crore in Q3FY24 to Rs. 97 crore in Q3FY25.
Business Mix
The company recognizes its operational revenue under the Automotive Tyres, Tubes, and Flaps as its sole segment. Based on Standalone 9MFY25 revenue, Truck & Bus Tyres contributed 30 percent, followed by 28 percent from 2 or 3 Wheeler, 20 percent from Passenger Cars, 15 percent from Off-Highway, and 7 percent from Light Commercial Vehicle.
Company Profile
CEAT Limited is a leading tyre manufacturer that produces tyres for various vehicles, including two-wheelers, cars, trucks, and tractors. With global exports and multiple manufacturing plants in India, CEAT delivers over 165 million tyres annually.
Written by – Santhosh S
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