Investors drove up the price of this tyre company by 20% in one day
The stock opened at Rs 1384 and hit an upper circuit by 20% to Rs 1661.
Shares of CEAT Ltd increased by 20% on Thursday on BSE. The stock opened at Rs 1384 and hit a high of 20% to Rs 1661. As of now, the market cap of the company is Rs 6718 crores. The stock's 52-week high and low are Rs 1661 and Rs 890 and is selling at a PE of 103x now. The company has an ROE of 6.35% and a ROCE of 2.59%.
Founded in 1958, CEAT has quickly grown to become one of India's largest and most successful tyre manufacturers. In 2020, the Great Place to Work Institute recognised CEAT as the 35th best company to work for in India, and as one of the finest in the auto and auto component business.
At the moment, 33% of sales are generated from trucks and buses, 30% from 2/3 wheelers, 13% from passenger cars, 9% from farms, 8% from light commercial vehicles, and 7% from speciality vehicles.
At 71%, the aftermarket is the company's most lucrative segment, followed by OEM sales at 17% and exports at 13%.
With pandemic-driven limitations relaxing, pent-up demand from original equipment manufacturers (OEMs), and the replacement segment all on the rise, the business anticipates a prosperous year for the tyre industry as a whole. It is expected that the cooling off in the pricing of major raw materials from their highs would also contribute to improved margins beginning in the third quarter of FY23.
The firm places special emphasis on emerging technologies including electric vehicles, sustainability, and smart tyres, and has made substantial investments in tyre testing infrastructure to accommodate these trends. It has a research and development centre in Halol, India, and a research and development office in Germany.
Revenue in the first quarter of FY23 rose by 48% year over year to Rs 2818 crore. However, the June quarter net profit decreased by 62% QOQ and 66% sequentially due to a decrease in operating margins from 7.2% to 5.9%.
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