VALUE PICK JULY ’18: CEAT Limited, Update
Update
Q1 FY 2022-23 Numbers
CEAT Limited – an Indian multinational tyre manufacturing company owned by the RPG Group has presented its quarterly numbers (Q1 FY 2022-23) today after market hours.
Revenue from Operations
On a standalone basis, the company’s revenue from operations stood at INR 2803.08 Cr for the quarter ended 30 June 2022 as compared to INR 2576.43 Cr, registering a growth of 8.79% Q-O-Q basis. The Y-O-Y revenue for the company jumped by 47.70% (revenue of INR 1897.76 Cr for the period ended 30 June 2021)
Expenses
Total expenses of the company are as follows –
INR 2801.64 Cr as on 30 June 2022
INR 2556.62 Cr as on 31 March 2022
INR 1873.94 Cr as on 30 June 2021
Profit After Tax
The Company has generated a profit after tax of INR 2.55 Cr for the quarter ended 30 June 2022 as against INR 13.29 Cr for the quarter ended 31 March 2022, registering a fall of 80.81% Q-O-Q basis. However, the Y-O-Y profit of the company de-grew by 87.22% (PAT of INR 19.95 Cr for the period ended 30 June 2021)
Elevated raw material prices (such as crude oil which is almost doubled amid the Russia-Ukraine war), coupled with higher depreciation and other expenses are some of the reasons why the company has registered a fall in PAT.
The Earning Per Share of the Company are as follows –
INR 0.63 as on 30 June 2022
INR 3.29 as on 31 March 2022
INR 4.93 as on 30 June 2021
Daily Chart –
The share of ceat tyres ends at INR 1200 today with a volume of 52,793 shares on the National Stock Exchange.
The stock is currently trading 32% below when compared to its 52-week high of INR 1763.
CEAT is a value pick stock of Finblab and is maintaining a BULLISH view on the company.
Also Read: IMPORTANT Q1 RESULTS FOR THE WEEK – 18 TO 24 JULY ’22
4 July 2018
Company Background –
History
Head-quartered in Mumbai, CEAT Limited is the flagship company of the RPG Enterprises, was established in the year 1958 in collaboration with Tata Group.
The company was established with the main object to construct, produce, prepare, manufacture, press, vulcanize, repair, retread, purchase, sell, import and to deal in tyres, semi-tyres for all types of vehicles and inner tubes, flaps and repairs material in general.
Today, CEAT is one of India’s leading tyre manufacturers and has strong presence in global markets.
Business
- CEAT Limited is one of India’s leading tyre manufacturers.
- In the year 1960, the first tyre rolled out from the Company’s factory at Bhandup (Mumbai). In the year 1972, the Company set up a Research and Development (R&D) unit at their plant in Bhandup.
- The Company produces over 15 million tyres a year and offers the widest range of tyres to all segments and manufactures world-class radials for: (1) auto-rickshaws, (2) passenger cars, PC (3) earthmovers, (4) forklifts, (5) heavy-duty trucks and buses, T&B (6) light commercial vehicles, LCVs (7) motorcycles and scooters, (8) tractors, and (9) trailers.
CEAT Limited – Network
- CEAT Limited marks the highest exports from India in truck, OTR and LCV categories to over 130 countries, yet the Company’s real accolades come in the form of rewards and recognition through a host of awards and participation in events!
- The Company has a robust national network consisting of 34 regional offices and over 3,500 dealers among which approximately 100 are exclusive dealers running the CEAT Shoppe outlets for passenger cars segments and 96 exclusive dealers running the CEAT HUBs for Truck & Bus Segments.
- The Company meet and exceed expectations of its customers: with special sizes, quality that matches world standards, and a global presence.
CEAT – Manufacturing Plants
The company operates two plants in Maharashtra, one in Bhandup and the other in Nasik.
CEAT Limited – Client List
- Passenger Car (PC): Maruti, Tata Motors, M&M, Renault, Hyundai, and Datsun
- 2 Wheelers: Honda, Hero, Bajaj Auto, Royal Enfield, Yamaha, and Suzuki
- Small Commercial Vehicles: PVPL, M&M, Force Motors, Atul Auto, SIL, Tata Motors, and Ashok Leyland
- Light Commercial Vehicle (LCVs): Tata Motors, Ashok Leyland, Eicher, SML, Daimler India, and M&M
- Heavy Commercial Vehicles: Daimler India, Tata Motors, Ashok Leyland, Eicher, and Asia Motor Works (AMW)
- Farm Vehicles: M&M, Tafe, Swaraj, Escorts, Sonalika ITL, Eicher, Force Motors, and Preet
- Off-the-road Vehicles: Telcon, L&T, JCB, Escorts International Tractors Ltd, Caterpillar, and BEML
Listed On –
The company’s shares are listed for trading on National Stock Exchange (NSE) & Bombay Stock Exchange (BSE) in India.
Stock Information
Share Holding Pattern
CEAT – Financials
Conclusion –
Working closely with the R & D department of its partners, CEAT Limited manufacture highly-durable, customised tyres for Indian vehicles.
The company promoters have solid and steady stake since last 4 quarters (50.76%), and some of the well-known institutions like Mirae Asset, TATA INDIA, Westbridge, and FIIs have high stake in the company.
CEAT Limited reported good set of numbers for Q4 FY18. Consolidated revenue of the company was up 14% YOY at INR 1,674 Cr. Consolidated EBITDA was up 49% YOY at INR 198 Cr. EBITDA margin expanded 280bps YOY to 11.8%. Consolidated PAT after Minority Interest, share of associates and exceptional items was 16% YOY higher at INR 77 Cr.
The Company is lining up investments of INR 3,500 to 4,000 Crore towards new capacity addition over the next 3 to 5 years. The Company is enhancing capacity of passenger car radials, two-wheeler and off-highway tyres and there would be an overall jump of 50% in capacity post full ramp up due in FY21.
The way Rubber prices are falling this could add profitability to the tyre company as well.
Considering the above mentioned factors, the techno-funda analysis, and sector outlook in mind; CEAT Limited looks good at INR 1265. FinBlab recommends investing in a stock keeping a long-term view in mind. (One can accumulate on decline also).
Also Read –
1) Finblab’s Valuepick Stock for the month of June – SUNDRAM FASTENERS LIMITED (8.50% return in 1 month)
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