CEAT Tyres: A Strong Performer in the Tyre Industry FY23Q4 Results

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CEAT tyres is one of the leading tyre manufacturers in India, with a presence in over 100 countries. The company offers a wide range of tyres for different segments, such as passenger cars, two-wheelers, commercial vehicles, farm equipment, and specialty vehicles. CEAT tyres are known for their quality, durability, and performance.


CEAT Tyres: Q4 Results 2023 Highlights

CEAT tyres has recently announced its audited financial results for the fourth quarter and full year ending on March 31, 2023. The company has delivered a strong performance, driven by volume and price growth, lower raw material costs, and improved operational efficiency. Here are some of the key highlights of the Q4 results 2023:


  • The consolidated revenue for the quarter stood at Rs. 2,875 crore, up by 11% year-on-year (YoY) from Rs. 2,592 crore in Q4 FY2212.
  • The consolidated EBITDA (earnings before interest, tax, depreciation, and amortization) for the quarter was Rs. 376 crore, up by 77% YoY from Rs. 212 crore in Q4 FY2212. The EBITDA margin expanded by 458 basis points (bps) to 13.1% from 8.5% in Q4 FY2212.
  • The consolidated net profit for the quarter was Rs. 132 crore, up by more than five-fold YoY from Rs. 25 crore in Q4 FY22134. The net profit margin improved by 374 bps to 4.6% from 0.9% in Q4 FY2214.
  • The consolidated revenue for the full year FY23 was Rs. 11,315 crore, up by 21% YoY from Rs. 9,363 crore in FY2212.
  • The consolidated EBITDA for the full year FY23 was Rs. 982 crore, up by 36% YoY from Rs. 721 crore in FY2212. The EBITDA margin improved by 97 bps to 8.7% from 7.7% in FY2212.
  • The consolidated net profit for the full year FY23 was Rs. 182 crore, up by 158% YoY from Rs. 71 crore in FY22134. The net profit margin improved by 83 bps to 1.6% from 0.8% in FY2214.

CEAT Tyres: Q4 Results 2023 Analysis

The impressive performance of CEAT tyres in Q4 FY23 can be attributed to several factors, such as:

  • Strong domestic demand: CEAT tyres witnessed a robust growth in the domestic market, especially in the OEM (original equipment manufacturer) and specialty & passenger category tyres segments1. The company benefited from the recovery in the automotive industry after the lockdowns and disruptions caused by the pandemic.
  • Lower raw material costs: CEAT tyres was able to reduce its cost of materials consumed by 6.1% YoY to Rs. 1,661 crore in Q4 FY23 from Rs. 1,768 crore in Q4 FY223. This was mainly due to the lower prices of natural rubber and crude oil derivatives, which are the key raw materials for tyre production.
  • Improved operational efficiency: CEAT tyres improved its operational efficiency by optimizing its product mix, enhancing its capacity utilization, and implementing cost-saving initiatives1. The company also reduced its debt by approximately Rs. 250 crore in Q4 FY23, supported by improved cash flow and inventory management3.

CEAT Tyres: Outlook and Future Plans

CEAT tyres is optimistic about the future prospects of the tyre industry and its own growth potential. The company expects to see further improvement in demand and margins in the coming quarters, as commodity prices stabilize and global inflation slows down1. The company is also focused on expanding its product portfolio and market reach, as well as investing in innovation and technology.

Some of the future plans of CEAT tyres include:

  • Launching new products: CEAT tyres plans to launch new products for various segments, such as SUVs (sport utility vehicles), EVs (electric vehicles), two-wheelers, and off-highway tyres1. The company also aims to introduce more premium and high-performance tyres to cater to the changing customer preferences and needs.
  • Increasing capacity: CEAT tyres plans to increase its capacity across its existing plants as well as set up new plants to meet the growing demand for its products1. The company is currently setting up a greenfield plant at Chennai with an investment of Rs. 1,400 crore, which will have an annual capacity of around 95 lakh tyres1. The plant is expected to be operational by mid-FY24.
  • Enhancing digital capabilities: CEAT tyres plans to leverage digital platforms and tools to enhance its customer experience and engagement1. The company has launched several digital initiatives, such as online tyre booking service ‘Shop Online’, online tyre selector tool ‘Tyre Finder’, online service booking platform ‘Service on Wheels’, and online tyre care program ‘Tyre Health Check’.

CEAT Tyres: Dividend Announcement

CEAT tyres has announced a dividend payment of Rs. 12 per equity share for FY2312. This translates into a dividend yield of 0.7% based on the closing price of Rs. 1,668 on May 4th ,2023.

Conclusion

CEAT tyres is a strong performer in the tyre industry, with a solid track record of growth and profitability. The company has delivered a stellar performance in Q4 FY23, driven by volume and price growth, lower raw material costs, and improved operational efficiency. The company is optimistic about the future outlook and has several plans to launch new products, increase capacity, and enhance digital capabilities. The company has also rewarded its shareholders with a dividend payment of Rs. 12 per share for FY23.

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