Q2 2025 CEAT Ltd Earnings Call Transcript
Key Points
- Ceat Ltd (BOM:500878) achieved its highest-ever turnover of approximately INR 3,300 crores in Q2 FY25, with a significant volume achievement.
- The company inaugurated a new truck-bus radial production line in Chennai, marking a milestone in its global expansion strategy.
- International business grew by strong double digits year-on-year, with notable growth in Latin America and Europe.
- Replacement volumes grew in strong double digits, driven by healthy growth in commercial vehicle tires, passenger tires, and two-wheeler tires.
- The company is focusing on premium categories, enhancing its brand image and capturing new audiences, which is reflected in strong growth in the replacement segment.
- Ceat Ltd (BOM:500878) faced challenges with elevated freight rates, which impacted margins despite strong international business growth.
- Raw material prices increased significantly, with a steep 6% rise in Q2 over Q1, making it difficult to pass on the entire cost increase to customers.
- OEM segment experienced a single-digit decline, primarily due to a temporary loss of business share and slow pace of new vehicle entries.
- The company's EBITDA margin contracted by 400 basis points year-on-year, primarily due to increased raw material costs.
- Working capital increased by INR 290 crores quarter-on-quarter, largely due to higher inventory levels, impacting cash flow and increasing debt.
Ladies and gentlemen, good day, and welcome to the CEAT Limited Q2 FY25 Earnings Conference Call, hosted by DAM Capital Advisors Limited. (Operator Instructions) Please note that this conference is being recorded.
I now hand the conference over to Mr. Mitul Shah from DAM Capital. Thank you, and over to you, sir.
Thanks, Del. Good afternoon, everyone. On behalf of DAM Capital, I welcome you to the Q2 FY25 Results Conference Call of CEAT Limited. From the management side, we have Mr. Arnab Banerjee, Managing Director and CEO; and Mr. Kumar Subbiah, Chief Financial Officer.
I would now hand over the call to Mr. Arnab Banerjee for his opening remarks. Over to you, sir.
Thank you. Good afternoon, and welcome to CEAT's Quarter 2 FY25 Earnings Call. I'll be taking you through the business updates for the quarter and shall hand over to Kumar for his remarks and
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