CEAT shares tumble 6% as high raw material costs hit profitability in Q3 FY25; check key numbers

The company on Wednesday reported a 46.48% decline in consolidated net profit to ₹97.03 crore for the third quarter ended December 31, impacted by high raw materials costs.

The company had posted a consolidated net profit of ₹181.28 crore in the same quarter last fiscal.

Its consolidated revenue from operations stood at ₹3,299.9 crore against ₹2,963.14 crore in the year-ago period, it added.

The total expenses were higher at ₹3,175.58 crore compared to ₹2,738.53 crore a year ago. The cost of materials consumed was ₹2,116.52 crore, up from ₹1,694.91 crore in the third quarter of the last fiscal year, the company said.

The CEO said the strong year-on-year double-digit revenue growth was driven by the replacement segment.

On the outlook, he said, "The demand continues to remain stable, and our order book pipeline is robust across all segments. Raw material prices look flattish in Q4, and we expect growth momentum to continue".

Shares of CEAT have rallied over 20% in the past 12 months.

Kumar Subbiah, CFO of CEAT Limited, said, “The gross margins were impacted during the quarter due to the increase in raw material cost. A part of it we managed through price increases and cost controls. Meanwhile, our capex during the quarter was ₹283 crore, which was fully funded through internal controls, and hence, our debt level has remained at a similar level.”

The company's EBITDA margin came in at 10.5%, down 64 bps QoQ and 387 bps YoY.

About CEAT Ltd

CEAT is a leading tyre manufacturer with a strong presence in over 110 countries. Headquartered in Mumbai, India, CEAT is the flagship company of the RPG group. It produces more than 41 million high-performance tyres, catering to various segments like 2-3 wheelers, passenger and utility vehicles, commercial vehicles, and off-highway vehicles.

RPG Group, established in 1979, is one of India’s fastest-growing business groups with a turnover of US$ 4.8 billion. The group has diverse business interests in the areas of infrastructure, tyres, pharma, IT, and specialty, as well as in emerging innovation-led technology businesses.