CEAT Limited Q1 FY25 Earnings Call Summary
Earnings Call Details
• Date: July 25, 2024
• Event: Transcript availability for Q1 FY25 earnings call (held on July 19, 2024)
• Moderated by: Jay Kale (Elara Securities)
• Key Speakers: Arnab Banerjee (Managing Director & CEO), Kumar Subbiah (CFO)
Financial Highlights
• Standalone Profit: Declined by 6.4% to INR 149.2 crores
• Revenue Growth: Increased by 8.5%
• Consolidated Net Revenue: INR 3,192.8 crores (8.8% year-on-year growth)
• EBITDA: INR 388.2 crores (12.2% margin, down 130 basis points)
Industry Insights
• Tyre Industry Growth: Driven by economic progress and vehicle utilization
• Challenges: Rising raw material costs leading to margin pressure
• Product Launches: New products like Milaze X5 tyre
Strategic Focus
• Premiumization and International Expansion: Aiming for 25% contribution from international business
• Sustainability Commitment: 3% reduction in carbon emissions per metric ton of production
• Investment Plans: Continued investment in marketing and R&D
Market Outlook
• Replacement Segment Growth: Expected double-digit growth due to rural demand
• OEM Growth: Muted, especially in truck-bus radials
• Price Increases: Planned in response to rising costs, particularly in truck-bus radial and 2-wheeler segments
Key Discussions
• Raw Material Costs: Anticipated further increases; need for 3-4% price hikes to cover costs
• Export Growth: Healthy but limited by container shortages
• EPR Accounting: Treated as regular raw material cost; decrease in EPR as a percentage of revenue noted
Competitive Landscape
• Pricing Strategy: Competitive pricing in 2-wheelers; more independence in truck-bus radials
• Market Share Concerns: Addressed potential loss due to price hikes in 2-wheeler segment
Conclusion
• Future Expectations: Optimism about demand and growth; focus on maintaining competitive pricing and addressing cost inflation.