Ceat (500878) Q2 24/25 earnings summary

Executive summary

• Achieved highest-ever quarterly revenue of INR 3,304.5 crores (up 8.2% YoY and 3.5% QoQ), driven by strong growth in Replacement and International segments, despite muted OEM performance.

• EBITDA margin contracted to 11.1% (down 399-400 bps YoY, 94-102 bps QoQ) due to higher raw material and employee costs.

• PAT fell to INR 121.5 crores, down 41.5% YoY and 21.2% QoQ, reflecting margin pressures and increased costs.

• Inaugurated a new Truck-Bus Radial production line in Chennai, targeting export markets like Europe and the U.S.

• Replacement volumes grew in strong double digits across commercial, passenger, and two-wheeler segments, supported by robust rural demand and premiumization strategy.

Financial highlights

• Consolidated net revenue grew 8.2% YoY and 4.1% QoQ to INR 3,304.5 crores, driven by both volume and price growth.

• Gross margin declined to 37.4%-37.5% (down 594 bps YoY, 182 bps QoQ) due to higher raw material costs.

• EBITDA stood at INR 367.9 crores, down 20.3% YoY and 5.2% QoQ.

• Debt increased to INR 1,885 crores, with D/E at 0.45x and Debt/EBITDA at 1.19x.

• CapEx for the quarter was approximately INR 208 crores.

Outlook and guidance

• Management expects accelerated growth in H2, with double-digit growth in Replacement and International business, and a rebound in OEMs due to new vehicle launches and festive demand.

• Freight rates are moderating, and container availability is improving, supporting export growth.

• Raw material inflation expected to continue at a lower rate (1.5%-2% QoQ in Q3), with potential margin improvement in Q4 as input costs stabilize.

• Further price hikes and cost efficiencies planned to offset raw material cost increases.