Ceat Ltd shares slide 6% as market reacts to disappointing Q4 performance

Ceat Ltd shares continued its downward momentum for the third day in a row on Tuesday, May 7, shedding as much as 6% in the session. The tyre stock has been on a slide since the release of the Q4 results last week.

Shares of Ceat Ltd closed 5.82% lower at ₹2,350 apiece on the NSE extending the losses for the third straight day following the release of weak financial results for the March quarter and full financial year 2023-24 on May 2.

The tyre-maker’s stock has fallen 10% since the release of Q4 results.

Ceat reported a 22.7% drop in consolidated net profit for the quarter ending on March 31, 2024, at ₹102.27 crore from ₹557.6 crore in the same period last year. The bottomline shed even sharply by 43.6% on a quarter-on-quarter (QoQ) basis from ₹181.25 crore in the December quarter.

The company’s total revenue from operations, on the other hand, gained slightly by 4% to ₹2,994.9 crore in the final quarter of FY24 as compared to ₹2,877.2 crore in the year-ago period, while rising 10% on a sequential basis.

Ceat’s net profit dropped primarily due to the rising rubber prices. To mitigate the impact of rising input cost, the company had also increased tyre prices by 1.5%.

On the operating front, the company expanded its earnings before interest, taxes, depreciation, and amortization (EBITDA) margin to 13.1% in the March 2024 quarter, indicating strength in a challenging market scenario.

Ceat reduced its consolidated gross debt by approximately ₹100 crore in the fourth quarter of FY24, due to an improved operational performance.

“The company ended the year on a positive note, we saw 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 expected positive momentum in Q1FY25,” said the MD and CEO of Ceat, Arnab Banerjee.