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CEAT Ltd
In the bustling industry of tires, CEAT Ltd. stands as a remarkable player, weaving its tale from the rubber plantations to the bustling highways of the world. Established in 1958, CEAT has grown from a modest beginning in India to become a formidable presence in the global tire market. Rooted in the philosophy of innovation and sustainability, the company has adeptly adapted to the shifting gears of technology and market demands. The heart of CEAT's operations pulses within its state-of-the-art manufacturing units, where raw materials metamorphose into high-performance tires that cater to a diverse clientele, including two-wheelers, trucks, buses, and even heavy-duty agricultural machinery. This production prowess is supported by rigorous quality controls and an unwavering commitment to safety, helping CEAT to carve out a reputation for reliability and performance.
CEAT's narrative continues beyond the confines of its factories. The company's strategic acumen is brilliantly displayed in its distribution network, which spans across 100-plus countries, ensuring that its products are within reach of a wide spectrum of consumers. Its revenue streams flow robustly from both domestic and international markets, boosted by an astute marketing strategy that emphasizes brand visibility and customer engagement. While CEAT thrives on direct sales to original equipment manufacturers (OEMs), the replacement market also represents a significant portion of its earnings, with individuals and businesses choosing CEAT for aftermarket tire upgrades. In this intricate dance of production and distribution, CEAT not only seeks to expand its market share but also to reinforce the sustainability of its operations, aligning growth aspirations with environmental stewardship and social responsibility.
In the bustling industry of tires, CEAT Ltd. stands as a remarkable player, weaving its tale from the rubber plantations to the bustling highways of the world. Established in 1958, CEAT has grown from a modest beginning in India to become a formidable presence in the global tire market. Rooted in the philosophy of innovation and sustainability, the company has adeptly adapted to the shifting gears of technology and market demands. The heart of CEAT's operations pulses within its state-of-the-art manufacturing units, where raw materials metamorphose into high-performance tires that cater to a diverse clientele, including two-wheelers, trucks, buses, and even heavy-duty agricultural machinery. This production prowess is supported by rigorous quality controls and an unwavering commitment to safety, helping CEAT to carve out a reputation for reliability and performance.
CEAT's narrative continues beyond the confines of its factories. The company's strategic acumen is brilliantly displayed in its distribution network, which spans across 100-plus countries, ensuring that its products are within reach of a wide spectrum of consumers. Its revenue streams flow robustly from both domestic and international markets, boosted by an astute marketing strategy that emphasizes brand visibility and customer engagement. While CEAT thrives on direct sales to original equipment manufacturers (OEMs), the replacement market also represents a significant portion of its earnings, with individuals and businesses choosing CEAT for aftermarket tire upgrades. In this intricate dance of production and distribution, CEAT not only seeks to expand its market share but also to reinforce the sustainability of its operations, aligning growth aspirations with environmental stewardship and social responsibility.
Strong Revenue Growth: CEAT reported consolidated revenue of INR 3,733 crores for Q2, up 14.2% year-on-year, driven largely by volume increases in OEM and international business.
Margin Expansion: Consolidated EBITDA margin improved to 13.5%, up 259 basis points quarter-on-quarter and 250 bps year-on-year, aided by lower raw material costs and better price/mix.
Gross Margin Recovery: Gross margin for the quarter rose to 40.9%, a 400+ basis points improvement, returning to the company’s long-term target zone.
Camso Acquisition Progress: The Camso deal was completed in September; integration is on track, though full margin and operational benefits are expected over the next 3–6 quarters.
GST Cut Passed On: 100% of the recent GST rate reduction on tires was passed on to customers, with management expecting this to support demand, especially in rural and semi-urban markets.
Debt and Capex: Debt increased to INR 2,944 crores due to Camso acquisition and capex, but leverage ratios remain comfortable with debt/EBITDA at 1.8 and debt/equity at 0.64.
Volume Growth: Overall volume growth for the quarter exceeded 11%, with strong gains in OEM and international business and single-digit replacement growth.