CEAT Ltd
CEAT Ltd (CEATLTD)

CEAT Ltd (CEATLTD)

₹1342.70.9%

Key Stats

₹1324.2
Day's Price Range
₹1365
₹890
52-Week Price Range
₹1421.4
1 Month Return10.52 %
3 Month Return31.47 %
1 Year Return1.12 %

Company Financials

  • Quarterly
  • Annual
Value in ₹ crore

Peer Comparsion

PE
Rank 282
75.6
EPS
Rank 103
₹17.6
BVPS
Rank 12
₹819.85
Dividend Yield
Rank 95
1.14%
ROE
Rank 142
13.96%
Price To Book Ratio
Rank 125
1.62
Debt To Asset
Rank 257
0.59

Company Information

CEAT the flagship company of RPG Group was established in 1958 as Ceat Tyres of India Ltd in collaboration with Tata Group. CEAT produces bestinclass high performance tyres for a wide range of vehicles including tyres for 2/3 Wheelers Passenger Vehicles and Utility Vehicles Commercial Vehicles and OffHighway Vehicles and produces over 37 Million tyres in a year. CEAT also manufactures and markets superior quality tubes and aps. The Replacement Original Equipment Manufacturing OEM and International Business segments accounted for 61 26 and 13 of CEATs revenue respectively in FY20. As on 31 March 2020 the Company had the 4 subsidiaries namely CEAT Specialty Tyres Limited Mumbai CSTL Rado Tyres Limited Kochi RTL Associated CEAT Holdings Company Private Limited Colombo Sri Lanka ACHL CEAT AKKhan Limited Dhaka Bangladesh CAL and 1 associate company namely Tyresnmore Online Pvt LtdDelhi.CEAT has footprint in over 100 countries across the world. CEAT has 6 manufacturing plants and 17 outsourcing units and plants are located in Nashik Mumbai Halol AmbernathChennai and Nagpur. Ambernath plant is undertaken by CEATs wholly owned subsidiary. CEAT also has a manufacturing facility in Sri Lanka through its overseas joint ventures. CEAT is aggressively working on expanding its manufacturing capacities across product categories for 2Wheeler tyres in Nagpur Commercial Vehicles Radial tyre plant in Halol and OffHighway tyres in Ambernath while also setting up a greenfield facility for Passenger Car tyres in Chennai. The companys network currently extends to more than 4000 dealers channel partners and over 35000 subdealers. The company has 4 manufacturing facilities at Bhandup Nashik Nagpur and Halol and is setting up a green field project. It has its representative offices at Indonesia Germany and the United Arab Emirates to serve customers in foreign markets. CEAT Specialty Tyres Limited CSTL a wholly owned subsidiary of the Company is engaged in manufacturing and sale of tyres for offtheroad vehicles and equipments which find application across industries including ports construction mining and agriculture. CSTL has set up an overseas subsidiary viz. CEAT Specialty Tires Inc. in USA.CEAT operates in Sri Lanka through a 50:50 Joint Venture JV named CEAT Kelani Holdings Company Private Ltd. Through CEAT Specialty Tyres Limited its wholly owned subsidiary CEAT has an offhighway tyre manufacturing plant at Ambernath Maharashtra which commenced commercial production in FY 201718. CEAT has invested heavily in the development of a stateoftheart RD centre at Halol to enable a funnel of innovative new products.Ceat Ltd. was established with the main object to construct produce prepare manufacture press vulcanize repair retread purchase sell import and to deal in tyres semityres for all types of vehicles and inner tubes flaps and repairs material in general. In February 22 1960 the first tyre rolled out from the companys factory at Bhandup in Mumbai. In the year 1972 they set up a Research and Development unit at their plant in Bhandup. In the year 1981 Deccan Fibre Glass Ltd was amalgamated with the company with effect from June 1 1981.In the year 1982 the RPG Group acquired the company. The company along with the Pradeshiya Industrial and Investment Corporation of UP Ltd. promoted a joint venture company namely UPCOM Cables Ltd in technical collaboration with Ceat Cari of Italy.During the year CTI Investments Ltd Ceat Investment Ltd and Ceat Finance Co Ltd became the wholly owned subsidiaries of the company. The company also entered into a collaboration agreement with Yokohama Rubber Company of Japan in order to keep abreast of the technological progress in the tyre industry as also developing radial tyres suitable to the Indian road conditions. In the year 1983 Atlantic Holdings Ltd and Malabar Coastal Holdings Ltd became the subsidiaries of the company. In the year 1987 the company entered into a technical collaboration agreement with Toray Industries Inc of Japan for setting up a factory for the production of nylon industrial yarn/cord and nylon tyre cord fabric at Malanpur in Madhya Pradesh.In the year 1988 the company entered into an agreement with Boseki Co Ltd Japan for improved technology for expansion of the licensed capacity of the fibreglass division to 5000 tonnes per annum. In August 1988 Meteoric Industrial Finance Co Pvt Ltd became a subsidiary of the company and in July 1989 Murphy India Ltd amalgamated with the company. OpThe company changed their name from Ceat Tyres of India Ltd to Ceat Ltd on January 10 1990. In the year 1993 the company entered into a collaboration agreement with Yokohama Rubber Company of Japan for the manufacture of Tyres at Nasik plant. In the year 1996 the company launched a new radial car tyre Maestro the first radial tyre in India to use stateoftheart polyester tyre cord technology combined with steel belts. They also launched a new heavyduty product Stamina which is a light commercial vehicle tyre. The radial tyre plant has commenced commercial production in Nasik and the formula one radial tyre was received in the market. Ceat is the first tyre company in India was awarded the International accreditation ISO/TS 16949 2002 Quality Standard Certification. The company entered into agreement with Pirelli of Italy for outsourcing radial tyres which were marketed in the brand name CEAT Spider RadialsDuring the year 200405 Malabar Coastal Holdings Ltd ceased to be a subsidiary company with effect from January 1 2005. During the year 200506 CEAT Ventures Ltd CEAT Holdings Ltd and Meteoric Industrial Finance Company Ltd the wholly owned subsidiary companies amalgamated with the company with effect from April 1 2006. During the year 200607 Associated Ceat Kelani Venture the joint venture company in Sri Lanka commissioned their radial plant. During the year 200708 the company proposes to set up two grassroot plants one in Maharashtra for Specialty Tyres and the other for Radial Tyres for Cars Utility Vehicles and Trucks at a total capital outlay of about Rs 900 crore. In March 2008 the company sold nearly seven acres of surplus land at Bhandup in Mumbai for Rs 1.3 billion. During the year 200809 the company successfully implemented the scheme of arrangement and consequently the investment undertaking of the company was transferred to CHI Investments Ltd with effect from July 1 2007.The company is in the process of setting up a plant in Halol Gujarat with the initial capacity of 90 mt per day and a planned outlay of approximately Rs 500 crore. The plant is expected to be ready for commercial production during the financial year 201011.CEAT has continuously focussed on new product launches and launched over a 100 new products in FY 201314. Product ranges like Gripp LN low noise for passenger car radials and Zoom for motorcycle tyres have been very successful. During the year under review the company launched the Dhoom 3 branded highspeed specialedition tyres and also released video games based on the boxoffice monster. Its new Dhoom 3 tyre is targeted at the younger segment and has provided a boost to the companys image as a quality tyre manufacturer.CEATs RD division rolled out over a hundred products between Sri Lanka and India across categories in FY 201314.CEAT achieved a full ramp up of its Halol radial facility with 80 percent of its capacity utilisation in FY 2014.During the year under review Rado Tyres Limited became a subsidiary of the company pursuant to the Order dated August 5 2013 passed by the Board of Industrial and Financial Reconstruction.During the year under review CEAT deferred a certain portion of its current maturities of longterm debt through fresh longterm funds thereby improving the current ratio compared to the previous year. The companys robust performance enabled it to fetch a twonotch upgrade in the external credit rating assigned to its debt program from BBB to A by FITCH India Ratings. This will further strengthen the creditworthiness of the company in the market and help it improve on its finance cost.Pursuant to the special resolution passed by the companys shareholders through Postal Ballot on March 7 2012 CEAT had on March 12 2012 issued and allotted 1712176 Warrants to one of the Promoter Group Companies viz Instant Holdings Limited Instant on a preferential basis convertible into an equal number of equity shares of face value of Rs 10/ each at a price of Rs 85.03 per Warrant. Of the said price 25 was received upfront at the time of allotment. The Warrants were convertible into equity shares at the option of the allottee within a period of 18 months from the date of allotment i.e. by September 11 2013. The allottee exercised its option for conversion of the said warrants by paying the balance 75 i.e. Rs 63.77 per Warrant and accordingly the said warrants were converted in to 1712176 equity shares and allotted to Instant on July 23 2013. These 1712176 equity shares were listed on the BSE Limited and the National Stock Exchange of India Limited on August 27 2013. CEAT continued its focus on development of new products and launched a number of new products in FY 201415 which included tubeless tyres for 2Wheelers new size introduction for compact SUVs and offroad biking tyres. These products have received good responses in their respective markets and segments and contributed to 27 of the turnover. For CEATs RD division the focus for the year was on developing products with superior grip manifested in the dry and wet surface braking distance to promote user safety without compromising on comfort.CEAT Shoppe network an exclusive retail channel of the company reached closed to 200 outlets as compared to 125 plus outlets at the end of March 31 2014. Further to increase the reach to replacement market in lower pop strata the company has also expanded its presence in the suburban and rural areas mainly for 2wheeler and passenger car tyres. As a result of this distribution drive the number of districts covered has gone up to 460 from almost 375 in last financial year.During the year under review CEAT embarked on a major capital expenditure programme to manufacture four wheeler passenger vehicle tyres and two/three wheeler tyres at its manufacturing facilities at Halol and Nagpur. CEAT Specialty Tyres Limited CSTL became a wholly owned subsidiary of CEAT with effect from 8 December 2014. Its business is manufacture and sale of tyres for off theroad vehicles/equipment which find application across industries including port construction mining and agriculture.During the year under review CEAT had pursuant to the special resolution passed by the members at the AGM held on September 26 2014 and through Postal Ballot on November 24 2014 issued and allotted 4494382 equity shares at a price of Rs. 890/ per share aggregating to Rs. 40000 Lacs to the eligible investors by way of Qualified Institutional Placement in accordance with the Chapter VIII of the SEBI Issue of Capital and Disclosure Requirements Regulations 2009 ICDR. The said shares were listed on the BSE Limited and the National Stock Exchange of India Limited on December 1 2014.During the financial year ended 31 March 2016 CEAT launched a total of 70 new products. Notable product launches from CEAT in FY 201516 were Milaze FuelSmarrt CZAR Sport in PCR/UVR and Zoom Rad Gripp XL Pro Gripp and Milaze TL in the twowheeler vehicle category. With regard to new product development the high point for the year under review was product developments with superior grip manifested in the dry and wet surface braking distance to promote user safety without compromising on comfort.With an objective to penetrate further and improve customer reach the Company continued to expand its distribution network. Further to increase the reach in replacement market with lower population strata the company has expanded its presence in the smaller towns and rural areas through an extensive distributor network mainly for twowheeler and passenger car tyres. As a result the number of districts covered has gone up to over 600 from around 460 in FY 201415. One key milestone for the company in the year gone by was adoption of its new purpose Making Mobility Safer and Smarter Every day.CEAT commissioned a greenfield unit for manufacturing twothree wheeler tyres at Butibori near Nagpur Maharashtra in March 2016. The company had undertaken expansion of capacity at its Halol Plant by 120 MT/day for manufacturing with a capital outlay of Rs. 650 Crores which is expected to be fully ramped up by first quarter of FY 201718. Towards this CEAT already commissioned a capacity of 39 MT/day by the end of March 2016.In another key investment made during FY 201516 CEAT through its subsidiary CEAT Specialty Tyres Limited CSTL invested in capacity for Off Highway Tyres OHT at Ambernath. The Ambernath land was transferred to CSTL in Q3 of FY 201516. During the year under review CSTL commenced trading in Off Highway tyres and sources these tyres from CEAT.CEAT has been following an assetlight approach for its manufacturing to conserve capital and increase returns to shareholders. Over the years the companys outsourcing business has grown substantially both in terms of volumes and quality systems. Focus at the outsourcing units continues to be on two and threewheeler vehicle tyre categories. During the year under review CEATs key OEM customer gave their approval to the companys outsourcing locations which indicates their confidence in the quality of control systems initiated by the company at the partner locations.During the year under review CEATs long term credit rating improved from A to AA by its rating agencies viz. CARE and India Ratings Fitch. The rating of AA indicates high degree of safety regarding timely servicing of financial obligations and very low credit risk.During the financial year ended 31 March 2017 CEAT launched a total of 92 new products across different product categories. A breakthrough innovation in the form of Puncture Safe motorcycle tyres was launched to address a key pain area of customers. The company has filed a patent for the same. In the Truck and Bus Radial TBR segment the company launched the WIN Series and grew by 15 in the TBR replacement market. During the year under review the company continued its efforts for channel expansion in a bid to maximise customer reach.In FY 201617 CEAT gained acceptance with premium brands in the OEM category viz. Royal Enfield Himalayan Bajaj Vikrant Honda Navi and Tork in twowheelers and Verna Refresh i10 refresh Renault Sedan/ SUV and Nissan SUV in the PC/UV category.During the year under review CEAT completed the capacity expansion undertaken at its Halol Plant and ramped the capacity to 120MT/day. The company also setup a green field manufacturing plant at Nagpur with an initial capacity of 120 MT/day for manufacture of twothree wheeler tyres at a capital outlay of Rs 420 crores. During the year under review CEAT s wholly owned subsidiary CEAT Specialty Tyres Limited CSTL commenced setting up of its green field facility at Ambernath in the State of Maharashtra with an initial capacity of 40 MT/ day which would subsequently be ramped up to 100 MT/day in the next phase.Several marketing initiatives including Overdrive Kwid Drive from Delhi to Paris MTV Roadies MTV Chase the Monsoon and Mahindra Adventure were undertaken during the year. The company also strengthened its brand association with cricket through a bat endorsement by Ajinkya Rahane.During the year under review the long term credit rating of the company improved from AA to AA with Stable outlook by its rating agencies viz. CARE and India Ratings Fitch. The rating of AA indicates high degree of safety regarding timely servicing of financial obligations and very low credit risk. A Stable outlook indicates expected stability or retention of the credit ratings in the medium term on account of stable credit risk profile of the entity in the medium term. During the year under review CEAT discontinued its Fixed Deposit Scheme and repaid all the outstanding fixed deposits along with interest accrued up to 30 September 2016.During the financial year ended 31 March 2018 CEAT became the first tyre company in the world outside Japan to receive the Deming Prize in 2017. The Deming Prize recognises companies that achieve business transformation by implementing Total Quality Management TQM. The Deming Prize reinforces and consolidates the companys reputation as a highquality producer of tyres and enables the company to gain ideal partner status for leading automobile companies in the world.During the year under review CEAT developed 65 new products. The company set up its European technical Centre at Frankfurt Germany to focus on break through products for customers and focus on passenger segment. During the year under review CEAT through its wholly owned subsidiary CEAT Specialty Tyres Limited commenced commercial production at the Ambernath plant for manufacture of offtheroad tyres for the specialty segment.During the year under review the company has launched a new safety initiative CEAT Safety Grip yet another step towards making Mobility Safer and Smarter Everyday. To overcome the common problem of tyre slippage faced by farmers the companys Aayushmaan tyres offered superior grip leading to better yield and efficiency.During the year under review Tyresnmore Online Private Limited TNM a private limited company incorporated on June 2 2014 having its registered office in New Delhi engaged in the business of selling automotive tyres accessories and providing services of installing fitting wheel balancing and wheel alignment for automotive tyres became an associate company of CEAT. On 23 June 2017 CEAT acquired approximate 31.93 of the fully diluted share capital of TNM by investing Rs 400 lacs through subscription of 50855 Compulsorily Convertible Preference Shares CCPS of face of Rs 1 each and 100 Equity Shares of face of Rs 1 each of TNM.During FY 201718 CEAT initiated a European Tech Centre in Frankfurt Germany to meet the stringent regulations and challenging requirements of the more matured European markets.During the year 201819 the Company introduced 49 new products. The Companys network extends to more than 4000 dealers and over 30000 subdealers. The Company currently has 4 manufacturing facilities at Bhandup Nashik Nagpur and Halol and is setting up a new facility near Chennai. It has representative offices in Indonesia Germany and the United Arab Emirates.The Companys subsidiary Rado Tyres Limited RTL has discontinued its operation after exploring all opportunities to revive /lease out the factory. The Government of Kerala gave their consent to close the factory permanently vide their letter dated October 6 2018. In order to reduce the losses RTL had offered Voluntary Retirement Scheme VRS to all its employees and was successfully implemented. During the year 2019 the Company invested a further amount of Rs. 300 Lacs through subscription of 12741 CCPS of the face value of Rs. 1 each of TNM and thereby holding 36.96 of the total share capital of TNM.During the year CEAT decided to merge CEAT Specialty Tyres Limited CSTL and the scheme was approved by the Board on April 3 2019.During the FY2020 the company spent towards Capex amounting to Rs 1028 crore.During the year 201920 CEAT commissioned the initial phase of its greenfield project in Chennai which has capacity to produce approximately up to 96 lacs tyres per annum of Passenger Car Radial Tyres when all the phases of the project is fully completed. CEATs brownfield project in Nagpur is nearing completion of its first phase and the plant is likely to be commissioned in the coming financial year depending on supply and demand conditions. The capacity of the CEATs 2Wheeler Tyre capacity would be approximately 1.7 Crore tyres per annum when the project is fully completed. To date CEAT has made investments in excess of Rs 2000 Crore across its expansion projects in Chennai Halol and Nagpur. More than Rs 3500 Crores has been earmarked for capacity expansion projects and this includes investments made in Halol Nagpur and Chennai capacity expansion. The remaining investments will be made in a staggered manner over the next 3 years. The company ranked among top 20 companies having innovative diversity policies and practices by DivHERsity Award 2020. The company awarded for Best Risk Management Framework and Systems in Auto Ancillary segment from CNBCTV18. The company also received Top Export Award by All India Rubber Industries Association for Excellence in Export for FY 201819. Also Awarded for Best Innovation in Employee Engagement and Best Use of Technology and Employee Engagement at Employee Engagement Summit and Awards 2020. On 19 August 2020 the company received the certified copy of the order from NCLTsanctioning the scheme of amalgamation of its subsidiary company CEAT Specialty Tyres Ltd with CEAT Ltd.The scheme takes effect from the Appointed Date being the 01 April 2019 and becomes operative from the effective date 01 September 2020.The company has issued 2500 NonConvertible Debentures of face value of Rs 10 lakhs each aggregating to Rs 250 crore on private placement in October 2020.
OrganisationCEAT Ltd
HeadquartersMumbai
IndustryTyres