Ceat shares fall after falling profits in September quarter

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Ceat’s operating profit margin improved 11 basis points per year to 9.2 percent.

Shares of Mumbai-based tire maker – Ceat Limited – fell 7.94 percent to an intraday low of Rs 1,191 after declining profits in the second quarter of the current fiscal year. Ceat’s net profit has fallen 77 percent annually to Rs 42 crore from Rs 182 crore during the same period last year due to rising input costs. The company’s revenue however jumped 27% to Rs 2,452 crore from Rs 1,978 crore in the September quarter of the previous fiscal year.

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The cost of materials consumed by the company jumped 54% to Rs 1,661.6 crore, from Rs 1,052 crore in the same quarter last year.

Ceat’s EBITDA margin, also known as operating profit margin, improved 11 basis points per year to 9.2%.

“Overall market demand continues to be robust, despite some lag in the commercial and agricultural categories. We recorded strong growth of 28% compared to the previous quarter due to good performance in the replacement market, particularly in the passenger segment. The increase in the cost of inputs has had an impact on our gross margins; however, this was partially offset by price adjustments during the last quarter, ”said Anant Goenka, CEO of Ceat in a statement.

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Ceat shares have so far gained 20% this year, underperforming Sensex which has gained 28%.

At 10:57 a.m. Ceat shares were trading down 4.71% to Rs 1,232.50.

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