On Thursday, January 16, CEAT, a company that makes tyres, announced that it has made less money this past quarter. CEAT’s profits dropped by about 46% to Rs 97.03 crore compared to Rs 181.28 crore last year. The main reason for this drop is due to high costs for raw materials.
But it wasn’t all bad news. CEAT’s total income from sales went up to Rs 3,299.9 crore, which is more than last year’s Rs 2,963.14 crore. However, their total expenses also increased to Rs 3,175.58 crore from Rs 2,738.53 crore a year earlier. This means they spent a lot more money, especially on materials, which cost Rs 2,116.52 crore, rising from Rs 1,694.91 crore last year.
Arnab Banerjee, the CEO of CEAT, said that while the higher costs affected their profits, they managed to increase prices in some product categories to help cover those costs. He mentioned that their sales grew significantly thanks to the replacement segment, meaning customers continue buying new tyres to replace old ones.
Looking to the future, Banerjee said that demand for their tyres remains strong, and they have a good number of orders. He expects the prices for raw materials to stay stable in the next quarter.
As for CEAT’s stock, experts say it has potential. Trendlyne’s data shows that the average target price for CEAT shares is Rs 3,456. This means the stock could go up by around 13% from where it is now. Out of 17 analysts, most have suggested buying the stock.
Recently, CEAT shares closed at Rs 3,057, which is a 0.5% increase. Over the last six months, the stock has increased by 12% and by 82% in the past two years. Currently, CEAT has a market value of Rs 12,367 crore.
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