CEAT shares surge 7% as Q2 net profit jumps multifold

Shares of CEAT Limited zoomed 7 percent to Rs 2,249 in early trade on October 17 after the company reported a 2,556 percent increase in net profit to Rs 208 crore for the second quarter as sales picked up and expenses dropped.

In the quarter, consolidated total revenue stood at Rs 3,053.3 crore, marking a growth of 5 percent against Rs 2,894.5 crore during the same period last year, the company said in an exchange filing on October 16.

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The company’s total quarterly expenses decreased by 2.5 percent, primarily driven by a notable 14 percent reduction in input costs.

At the operating level, the EBITDA for the second quarter of this fiscal was Rs 456.1 crore, an increase from the Rs 203.1 crore reported in the same period of the previous fiscal.

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The EBITDA margin for the reporting quarter was 15 percent, as compared to the 7 percent margin recorded in the corresponding period of the previous fiscal. EBITDA is earnings before interest, tax, depreciation, and amortization.

Commenting on the results as well as the outlook of the business, Arnab Banerjee, MD and CEO of the company said “Demand continues to be stable, and we are witnessing mid-single-digit growth in our topline across all three segments – replacement, OEMs, and international business”. “Our focus on product mix and judicious pricing helped improve margins during the quarter”, he further added.

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