CEAT's Q2 FY25 financials show mixed results, with positive trends in cash flow and sales, but concerns in profitability and efficiency.

CEAT, a midcap company in the tyres and allied industry, recently declared its financial results for the quarter ending September 2024. According to MarketsMOJO, the stock call for CEAT is ‘Hold’.

The company has seen a negative financial performance in the quarter, with a score of -11 compared to 3 in the previous quarter. However, there are some positive aspects to CEAT’s financials. The company has shown a consistent growth in operating cash flow over the last three years, with the highest amount of Rs 1,723.91 crore generated annually. Additionally, the net sales for the quarter were the highest in the last five quarters, indicating a positive trend in the near term. CEAT has also been distributing higher dividends to its shareholders from its profits.

On the other hand, there are some areas of concern in CEAT’s financials. The profit before tax less other income (PBT) for the quarter has fallen by 26.8% compared to the average of the previous four quarters. The same trend is seen in the profit after tax (PAT), which has fallen by 28.9%. The company’s ability to manage interest payments has also deteriorated, with the operating profit to interest ratio being the lowest in the last five quarters. The operating profit has also been consistently falling in the last five quarters, indicating a negative trend. The operating profit margin has also decreased each quarter, showing a decline in the company’s efficiency.

Overall, CEAT’s financial performance for the quarter ending September 2024 has been negative, but there are some positive aspects to its financials. Investors are advised to hold their position in the stock, according to MarketsMOJO.