Homemarket Newsstocks News

    CEAT worst hit on Nifty500; stock tanks 10% as Q2 results disappoint

    CEAT worst hit on Nifty500; stock tanks 10% as Q2 results disappoint

    CEAT worst hit on Nifty500; stock tanks 10% as Q2 results disappoint
    Profile image

    By Dipti Sharma   IST (Published)

    Mini

    CEAT shares tanked as much as 10 percent on Tuesday and were the worst performers on Nifty500, after lower-than-expected net profit for Q2 wrecked investor sentiment.

    CEAT shares tanked as much as 10 percent on the BSE in early morning trade on Tuesday and were the worst performers on Nifty500 after lower-than-expected net profit for Q2 of FY22 wrecked investor sentiment.
    The auto-ancillary company reported a consolidated net profit of Rs 42 crore in the quarter ended September as compared to Rs 181.9 crore posted in the corresponding quarter last year.
    ceat results, ceat share price, ceat, stock market
    ceat results, ceat share price, ceat, stock market
    The company's revenue rose nearly 24 percent on-year to Rs 2,451.8 crore in Q2.
    Operating margin witnessed a sharp contraction to 9 percent in Q2 from 14.8 percent reported a year ago. A jump in raw material costs, employee benefit expenses, depreciation and amortisation expenses, and other expenses weighed on CEAT's operational performance.
    The management said, the rising input cost has weighed on the company's gross margins but has been partially offset by price adjustments over the last quarter.
    "While the steep increase in input costs continued to put pressure on our margins, there was a slight increase in our debt levels as well, largely on account of higher capital expenditure and higher inventory," said Kumar Subbiah, CFO of CEAT.
    ICICI Securities likes CEAT’s plan to drive growth by way of market share gains while focusing on margins.
    However, sustained capital expenditure intensity and lower industry pricing power are likely to curtail free cash flow generation and increase leverage. Improvement in return on capital employed is also unlikely to surpass 15 percent in FY24 thereby curtailing potential valuation expansion, the brokerage added.
    A management conference call with analysts is scheduled for later today, which is expected to shed more light on CEAT's performance and prospects.
    At 09:52 am, shares of the RPG Group company were down 5.2 percent at Rs 1,225.60 on the BSE. The scrip opened with a gap down open of 6.5 percent today.
    The stock has been losing for the last three days and has fallen over 9 percent during the period.
     
    Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
    arrow down

      Most Read

      Market Movers

      View All
      CompanyPriceChng%Chng