CEAT Reports Q3 FY24-25 Results Amidst Rising Interest Expenses and Declining Profits

CEAT, a midcap player in the tyres and allied industry, has reported its financial results for the third quarter of FY24-25, disclosed on January 15, 2025. The company has faced notable challenges, leading to an adjustment in its evaluation.
The financial indicators present a concerning picture for CEAT. The operating profit to interest ratio has reached a low point of 4.54 times, suggesting difficulties in managing interest obligations. Profit Before Tax (PBT) is reported at Rs 124.32 crore, which reflects a significant shift compared to the average PBT of Rs 191.60 crore over the previous four quarters. Similarly, Profit After Tax (PAT) has also seen a notable change, now standing at Rs 97.11 crore, down from an average of Rs 149.89 crore.

Operating profit has declined to Rs 340.90 crore, with an operating profit margin of 10.33%, indicating challenges in maintaining operational efficiency. Furthermore, interest expenses have risen to Rs 75.09 crore, marking the highest level in five quarters, which points to increased borrowing activity. Earnings per share (EPS) have also been affected, now at Rs 24.01, reflecting the company's struggles with profitability.

In light of these developments, CEAT's evaluation has undergone a revision, reflecting the current financial landscape.

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