CEAT shares slump nearly 10% as Q4 net profit falls; tyremaker expects positive momentum in Q1FY25

CEAT's quarterly expenses rose 3.7 percent to Rs 2,798 crore, led by a 5.5 percent climb in raw material costs.

Shares of CEAT plunged 9.8 percent in morning deals on May 3 as the company's lackluster Q4 results left investors unimpressed. The tyre maker reported a 23 percent year-on-year decline in its consolidated net profit at Rs 102 crore for the fourth quarter ended March 2024 on higher rubber costs, new regulation on extended producer responsibility (EPR) liability.

Its revenue from operations, however, rose to Rs 2,992 crore in the period under review.

Prices of rubber, a key raw material for tyre manufacturers, rose roughly 10 percent in the Jan-March quarter, according to analysts. CEAT's quarterly expenses rose 3.7 percent to Rs 2,798 crore, led by a 5.5 percent climb in raw material costs. The company's EBITDA margin expanded to 13.1 percent in Q4.

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Arnab Banerjee, MD and CEO of CEAT said, the company ended FY24 on a positive note. "We saw a recovery in volumes in the second half of the quarter in replacement and international markets with stable margins for the quarter and significant improvement in the margins on a full-year basis and expect the positive momentum in Q1 FY25," he said.

CEAT's board has recommended a final dividend of Rs 30, i.e. 300 percent per equity share of the face value of Rs 10 each fully paid up, for FY24, subject to the approval of the members at the ensuing annual general meeting (AGM).

At 1:37 am, CEAT shares were trading 3.9 percent lower at Rs 2,518.45 on the National Stock Exchange (NSE). In the last one year, the stock has soared 53 percent, outperforming benchmark Nifty 50 which has risen around 25 percent during this period.

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