Shares of Ceat lost over 7% on Thursday after the firm reported a loss for the first time in six quarters amid rising input cost.
The stock hit a low of Rs 1,051.30 on BSE, down 7.24% in intraday. At 9.35am, the scrip was trading at Rs 1,077 on BSE down 5% from its previous close.
"CEAT Q3FY22 was operationally weak largely due to weak demand and lower gross margins. However, CEAT is a play on healthy replacement/OE outlook going forward as supply chain normalises, timely capacity addition and focus on market share gains in high margin segments like 2Ws, PCR and OHT (60% mix over next 4-5 years). CEAT trades at 13.1x of FY23 consolidated EPS", said Yes Securities in a note to investors. The brokerage firm has a buy rating and kept target price at Rs 1465.
Rivals Apollo Tyres fell 2.7%, Goodyear India 1%, JK Tyre & Industries 1% and MRF Ltd 2.33%.
The firm reported a net loss of Rs 20 crore against a profit of Rs 132.34 crore a year ago. Revenue declined 2% quarter on quarter to Rs 2413.27 croreled by weak replacement demand, subdued demand from OEMs due to chip shortage and softer uptick in rural market.
Total debt increased to Rs 2260 crore as on Dec 2021 versus Rs1550 crore as on Sep 2021 resulting in debt to equity ratio of 0.7x against 0.6x as on Sep 2021.
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