CEAT share price rises over 6% despite fall in Q4 net profit

CEAT share price gained over 6% today after the tyre maker reported a better operating performance for the quarter ended March 31. Share price of  CEAT rose  up to 6.34% to  Rs 820 against previous close of Rs 771.10 on BSE. CEAT stock has gained 10.34% in the last 7 days. The stock opened with higher with a gain of 3.62% at Rs 799 today. The small cap share trades higher than 5 day, 20 day and 50 day moving averages but lower than 100 day and 200 day moving averages.

Market cap of the firm rose to Rs 3,257 crore on BSE. Total 0.34 lakh shares changed hands amounting to turnover of Rs 2.76 crore. CEAT share price has lost 19.56% during last one year and fallen 18.62% since the beginning of this year.

Operating performance of the company came above expectations after earnings before interest tax and depreciation (EBITDA) increased 23.4 percent to Rs 200 crore from Rs 162.3 crore, YoY. EBITDA margin expanded by 350 bps to 12.7 percent from 9.2 percent.

"We managed to deliver good improvement in EBITDA margins in Q4 despite a drop in revenues in the second half of March due to COVID-19. Better product mix, lower raw material cost and strong cost controls helped in the expansion of margins," the company said.

However, net profit fell 19.58 per cent to Rs 51.72 crore for the fourth quarter against Rs  64.32 crore in January-March quarter a year ago. Revenue from operations fell to Rs 1,573.41 crore in Q4 compared with Rs 1,760.47 crore in the corresponding period of 2018-19.

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For fiscal year 2019-20, the company's net profit stood at Rs 230.06 crore as against Rs 251.08 crore profit in 2018-19. Revenue from operations declined to Rs 6,778.83 crore in FY20 as compared with Rs 6,984.51 crore in 2018-19.

"In Q4, our EBITDA margins have shown improvement despite the disruption caused by COVID-19," Ceat Ltd Managing Director Anant Goenka said.

The company has resumed operations at most of its factories with easing in lockdown restrictions, and is gradually witnessing pick up in demand as well, he added.

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