BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
Ceat Ltd.’s Q2 FY22 performance was below consensus expectations and profitability suffered mainly due to gross margin compression.
Growth momentum continues to be led by organic growth in commercial vehicle and passenger vehicle segments coupled with new PV order wins (e.g. Nissan Magnite, Renault Kiger, Mahindra Thar).
Outlook for H2 FY22 remains mixed due to worries on potential demand slowdown caused by original equipment manufacturer production cuts on account of chip shortages.
However, margins are likely to improve in H2 as price hikes are more amenable while inputs costs have softened a bit (Bangkok rubber prices down ~23% since Q1 FY22).
Ceat’s capex intensity is likely to peak in FY22; we expect free cash flow generation to improve in FY23E.
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