ICICI Securities: CEAT - Replacement Demand Drives Q2 Margins; Better Growth Outlook
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ICICI Securities Report
CEAT Ltd.’s Q2 FY21 performance was an all-round beat on consensus expectations.
Ebitda margins came in at 14.8% (19 quarter high). The beat was primarily driven by -
1. stronger revenue traction in medium and heavy commercial vehicle (33% share in H1 FY21; FY20 - approximately 31%) and two-wheeler (30% share in H1 FY21; FY20 - 31%) and
2. margin improvement due to mix (replacement share up to 71% from 58% and lower commodity prices on crude linked derivatives.
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