BQ Prime’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 BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Centrum Broking Report
Ceat Ltd. reported better than expected Ebitda margin in Q4 FY22 at 7.2% driven by price increases and better exports sales.
Exports have been robust, as Europe has contributed significantly this year. Ceat's channel expansion over the last few year is giving good results now. Exports margins are now better than replacement segment now. This is where the good part ends.
Going forward, we see multiple challenges-
higher crude price ($110 now versus $91 in Q4 FY22) will impact margins,
higher demand from original equipment manufacturer leading to adverse mix,
high interest cost from rising debt on capex needs.
To incorporate these challenges, we have cut our earnings by 25%/14% for FY23/24.
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