CEAT 2023-24 Annual Report Analysis

Mon, 5 Aug

CEAT has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during FY23-24.

CEAT Income Statement Analysis

• Operating income during the year rose 5.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 70.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 13.5% in FY24 as against 8.4% in FY23.
• Depreciation charges increased by 8.4% and finance costs increased by 11.1% YoY, respectively.
• Other income grew by 7.7% YoY.
• Net profit for the year grew by 248.3% YoY.
• Net profit margins during the year grew from 1.6% in FY23 to 5.3% in FY24.

CEAT Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	113,149	119,435	5.6%
Other income	Rs m	189	203	7.7%
Total Revenues	Rs m	113,337	119,638	5.6%
Gross profit	Rs m	9,467	16,143	70.5%
Depreciation	Rs m	4,693	5,088	8.4%
Interest	Rs m	2,421	2,691	11.1%
Profit before tax	Rs m	2,541	8,567	237.1%
Tax	Rs m	718	2,214	208.6%
Profit after tax	Rs m	1,824	6,353	248.3%
Gross profit margin	%	8.4	13.5
Effective tax rate	%	28.2	25.8
Net profit margin	%	1.6	5.3

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CEAT Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 43 billion as compared to Rs 41 billion in FY23, thereby witnessing an increase of 4.5%.
• Long-term debt down at Rs 10 billion as compared to Rs 14 billion during FY23, a fall of 33.6%.
• Current assets rose 0% and stood at Rs 27 billion, while fixed assets rose 5% and stood at Rs 73 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 100 billion as against Rs 96 billion during FY23, thereby witnessing a growth of 4%.

CEAT Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	34,396	40,426	17.5
Current Liabilities	Rs m	41,455	43,333	4.5
Long-term Debt	Rs m	14,406	9,566	-33.6
Total Liabilities	Rs m	96,277	99,947	3.8
Current assets	Rs m	26,888	26,906	0.1
Fixed Assets	Rs m	69,379	72,558	4.6
Total Assets	Rs m	96,277	99,947	3.8

CEAT Cash Flow Statement Analysis

• CEAT's cash flow from operating activities (CFO) during FY24 stood at Rs 17 billion, an improvement of 42.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -9 billion, an improvement of 0.5% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -9 billion on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -55 million from the Rs 369 million net cash flows seen during FY23.

CEAT Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-23	Mar-24
Cash Flow from Operating Activities	Rs m	12,055	17,193	42.6%
Cash Flow from Investing Activities	Rs m	-8,491	-8,537	-
Cash Flow from Financing Activities	Rs m	-3,195	-8,710	-
Net Cash Flow	Rs m	369	-55	-

Current Valuations for CEAT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 157.1, an improvement from the EPS of Rs 45.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,552.8, stands at 16.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.6 times, while the price to sales ratio stands at 0.9 times.
• The company's price to cash flow (P/CF) ratio stood at 7.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	2,797.3	2,952.7
TTM Earnings per share	Rs	45.1	157.1
Diluted earnings per share	Rs	45.1	157.1
Price to Cash Flow	x	9.0	7.7
TTM P/E ratio	x	33.7	16.7
Price / Book Value ratio	x	1.7	2.2
Market Cap	Rs m	58,075	88,558
Dividends per share (Unadj.)	Rs	12.0	30.0

Ratio Analysis for CEAT

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.6x during FY24, from 0.6x during FY23. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 4.2x during FY24, from 2.0x during FY23. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company improved and stood at 15.7% during FY24, from 5.3% during FY24. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 22.5% during FY24, from 10.2% during FY23. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 9.0% during FY24, from 4.4% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Current ratio	x	0.6	0.6
Debtors’ Days	Days	422	392
Interest coverage	x	2.0	4.2
Debt to equity ratio	x	0.4	0.2
Return on assets	%	4.4	9.0
Return on equity	%	5.3	15.7
Return on capital employed	%	10.2	22.5

To see how CEAT has performed over the last 5 years, please visit here.

CEAT Share Price Performance

Over the last one year, CEAT share price has moved up from Rs 2,461.6 to Rs 2,552.8, registering a gain of Rs 91.2 or around 3.7%.

Overall, the S&P BSE SENSEX is up 18.5% over the year.

(To know more, check out historical annual results for CEAT and quarterly results for CEAT)