CEAT shares hit new 52-week low as tyre company reports loss in Q3 amid rising input cost

Tyre manufacturer CEAT shares touched a new 52-week low of Rs 1051.3 per share, after slipping by over 7 per cent on the BSE intraday trade on Thursday, on the back of weak set of third quarter numbers for the financial year 2021-22 (Q3FY22). 

The company reported consolidated net loss of Rs 20 crore in October-December quarter as against a net profit of Rs 132.3 crore in the same quarter a year ago. Similarly, net revenue of the company grew to Rs 2,413 crore, up 8.6 per cent year-on-year. 

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While EBITDA (earnings before interest, taxes, depreciation, and amortization) margin also contracted by 935 bps at 5.9 per cent during the quarter. The stock has breached its earlier 52-week low of Rs 1,067.25, hit on December 24, 2021. 

The counter has recovered from lows is trading over 2 per cent down to Rs 1107.2 per share on the BSE, as compared to 0.8 per cent fall in the S&P BSE Sensex at around 12:30 pm today. 

In a spiral effect, the other tyre stocks like Apollo Tyres, JK Tyre, MRF, Balkrishna Industries also witnessed selling pressure, as each are down trading between 1-5 per cent on the BSE intraday. 

The management in its results commentary said that the company is witnessing muted demand in the replacement segment due to tepid consumer sentiment, higher fuel prices and a softer uptick in India's rural markets.  

The ongoing semiconductor shortages continue to impact OEM (original equipment manufacturer) passenger segment sales, the CEAT’s management further said. 

“We are taking necessary corrective actions to cut costs and are looking at appropriate price increases going forward,” CEAT Managing Director Anant Goenka said in his earnings comment. 

The stock has slumped over 15 per cent and 20 per cent in the last one year and 6 months on the BSE, as compared to 22 per cent and 15 per cent rise in the S&P BSE Sensex during same period respectively.