Why This Mukul Agrawal-Backed Small Cap Stock Is Skyrocketing Over 7.2% Today

Shares of tyre manufacturer CEAT were surging on Tuesday after the firm posted strong quarterly results on Monday.

What Happened: CEAT reported a net profit of ₹208 crore in the September quarter, showcasing significant growth compared to the previous year. In addition, CEAT’s revenue for the quarter reached ₹3,053.3 crore, up from ₹2,894.5 crore in the same period last year.

One of the highlights of CEAT’s second-quarter results was its EBITDA, which stood at ₹456.1 crore in the September quarter, a substantial increase from ₹203.1 crore in the previous year. This impressive growth in EBITDA translated into a notable rise in the EBITDA margin, which reached 14.9% from 7% in the previous year.

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Arnab Banerjee, managing director and CEO of CEAT highlighted the stability in demand and mid-single-digit growth in all three segments—replacement, OEMs, and international business. He emphasised the role of product mix and strategic pricing in enhancing margins.

CFO Kumar Subbiah highlighted the company’s consistent efforts to enhance cost efficiencies and product mix, resulting in a remarkable improvement in EBITDA margin. This included its EBITDA crossing ₹400 crore for the first time in a quarter, significantly contributing to an overall improvement in net profit. Efficient cash flow management and enhanced operating performance also enabled CEAT to reduce its standalone debt by around ₹103 crore.

Price Action: CEAT’s share price shot up 7.23% to ₹2,254 at the start of trade on Tuesday.

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