Ceat (500878) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 revenue reached INR 3,192.8 crores, up 8.8% YoY and 6.7% sequentially, driven by strong volume growth in replacement and export segments despite margin pressures from rising raw material costs.

• EBITDA margin declined to 12.2%, down 130 bps sequentially and 95 bps YoY, impacted by higher raw material and marketing expenses.

• PAT for Q1 FY25 was INR 154 crores, up from INR 144 crores YoY and INR 102 crores sequentially, with a 7.1% YoY increase.

• Price hikes were implemented across segments to offset raw material inflation, with further increases planned for Q2.

• Investments continued in R&D, brand repositioning, digital initiatives, and premiumization platforms.

Financial highlights

• Consolidated net revenue reached INR 3,192.8 crores, the highest ever in a quarter, with 8.8% YoY and 6.4% sequential growth.

• Gross margin contracted to 39.2%, down 306 bps QoQ and 184 bps YoY due to increased raw material costs.

• EBITDA for Q1 FY25 was INR 388.2 crores (12.2% margin), down 3.2% QoQ but up 0.9% YoY.

• Debt stood at INR 1,647 crores with a D/E ratio of 0.4x and Debt/EBITDA at 1.1.

• CapEx for the quarter was INR 254 crores, fully funded by internal accruals.

Outlook and guidance

• Double-digit growth is expected to continue in replacement and international segments, with rural demand supported by good monsoons.

• Price hikes taken in Q1 and early Q2 are expected to flow through in Q2, with further increases likely to fully offset raw material inflation.

• Focus remains on sustainable procurement and reducing carbon footprint by 50% by 2030.