ceat 4q fy 2013

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Please refer to important disclosures at the end of this report 1

Quarterly highlights (Standalone)Y/E March (` cr) 4QFY13 4QFY12 % chg (yoy) 3QFY13 % chg (qoq)Net Sales 1,311 1,224 7.1 1,205 8.8EBITDA 139 127 9.9 102 36.8

EBITDA margin (%) 10.6 10.4 28bp 8.5 218bp

Adj. PAT 61 41 47 31 98.6Source: Company, Angel Research

Ceat reported impressive performance for 4QFY2013 led by a strong sequential

EBITDA margin expansion of 218bp driven by ~8% qoq decline in natural rubber

prices. Consequently, net profit surged 98.6% qoq (47.1% yoy) to `61cr, which

was significantly above our estimates of `35cr. While we broadly maintain ourrevenue and EBITDA margin estimates for Ceat; we revise our earnings estimates

upwards by 12.1%/5.6% for FY2014/15, primarily to reflect the benefits of lower

interest cost going ahead. The company has reduced its interest burden by

~270cr in 2HFY2013 and the full benefits of this would be reflected in FY2014.Due to attractive valuations we maintain our Buy rating on the stock.Impressive 4QFY2013 results: For 4QFY2013, standalone top-line reported aslightly better-than-expected growth of 7.1% yoy (8.8% qoq) to `1,311cr which

was driven by a strong volume growth of 9.3% yoy (11.3% qoq). The volume

growth was led by a strong ~24% yoy (~21% qoq) growth in the OEM segment

led by new partnerships with Hyundai, Royal Enfield, Volvo-Eicher and Bajaj Auto.

The replacement segment however, posted a muted growth of 1.2% as the

demand in the segment remains weak. Net average realization registered adecline of ~2% yoy and qoq, largely due to adverse product-mix (higher OEM

share in total-mix). On the operating front, EBITDA margins jumped sharply by

218bp qoq to 10.6% against our expectations of 8.8%, as raw-material cost as a

percentage of sales witnessed a significant decline of 206bp qoq led by ~8%

decline in the natural rubber prices. Led by a strong operating performance, net

profit on a sequential basis witnessed a significant growth of 98.6% to `61cr.

Outlook and valuation: We retain our positive view on Ceat and believe that thecompany will continue to benefit from softening of commodity prices and lower

debt burden. However, slowdown in demand due to lower-than-expected pick-up

in replacement segment along with pressures from OEM to reduce prices may

adversely impact the company. At `119, the stock is trading at attractive

valuations of 2.4x FY2015E earnings. We maintain our Buy rating on the stockwith a target price of `170.

Key financials (Standalone)Y/E March (` cr) FY2012 FY2013E FY2014E FY2015ENet Sales 4,476 4,881 5,325 5,974% chg 27.9 9.1 9.1 12.2

Adj. net profit 11 134 140 166% chg (61.2) 1154.1 4.1 18.9

EBITDA (%) 5.6 8.8 8.4 8.3

EPS (`) 3.1 39.2 40.8 48.5P/E (x) 38.0 3.0 2.9 2.4

P/BV (x) 0.6 0.5 0.5 0.4

RoE (%) 1.6 19.1 17.3 17.6

RoCE (%) 10.5 20.4 21.2 21.9

EV/Sales (x) 0.3 0.2 0.2 0.2

EV/EBITDA (x) 5.5 2.6 2.3 1.9

Source: Company, Angel Research

BUYCMP `119

Target Price `170

Investment Period 12 Months

Stock Info

Sector

Bloomberg Code

Shareholding Pattern (%)

Promoters

MF / Banks / Indian Fls

FII / NRIs / OCBs

Indian Public / Others

Abs. (%) 3m 1yr 3yr

Sensex 1.6 17.6 18.6

CEAT 9.4 14.0 (10.3)

52 Week High / Low

54.2

17.8

CEAT@IN

Nifty

Reuters Code

6,044

CEAT.BO

Net Debt (`cr) 722

0.0

28.0

Tyre

Avg. Daily Volume

406

0.9

125/87

72,290

10

19,889

Face Value (`)

BSE Sensex

Market Cap (`cr)

Beta

Yaresh Kothari022-3935 7800 Ext: 6844

[email protected]

CEATPerformance Highlights

4QFY2013 Result Update | Tyre

May 7, 2013

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CEAT | 4QFY2013 Result Update

May 7, 2013 2

Exhibit 1:Financial performance (Standalone)Y/E March (` cr) 4QFY13 4QFY12 % chg (yoy) 3QFY13 % chg (qoq) FY2013 FY2012 % chg (yoy)Volume (MT) 59,000 54,000 9.3 53,000 11.3 214,500 202,100 6.1Net Sales 1,311 1,224 7.1 1,205 8.8 4,881 4,476 9.1Consumption of RM 858 858 0.0 806 6.4 3,309 3,298 0.4

(% of Sales) 65.4 70.1 66.9 67.8 73.7

Staff Costs 77 58 31.6 69 10.9 269 217 24.3

(% of Sales) 5.8 4.8 5.7 5.5 4.8

Purchase of traded goods 17 12 45.5 23 (26.3) 69 52 33.1

(% of Sales) 1.3 0.9 1.9 1.4 1.2

Other Expenses 220 170 29.5 205 7.3 810 663 22.1

(% of Sales) 16.8 13.9 17.0 16.6 14.8

Total Expenditure 1,171 1,097 6.7 1,103 6.2 4,457 4,229 5.4Operating Profit 139 127 9.9 102 36.8 425 247 72.0OPM (%) 10.6 10.4 8.5 8.7 5.5

Interest 45 54 (16.1) 47 (2.6) 194 192 1.2

Depreciation 20 19 4.2 20 (2.1) 78 70 10.9

Other Income 4 6 (32.4) 3 18.1 21 29 (25.2)

PBT (excl. Extr. Items) 78 60 31.1 39 102.2 173 13 1,247.6Extr. Income/(Expense) - - - (14) - (28) (3) -

PBT (incl. Extr. Items) 78 60 31.1 25 212.2 146 10 1,400.9(% of Sales) 6.0 4.9 2.1 3.0 0.2

Provision for Taxation 18 18 (5.0) 8 115.9 39 2 1,706.4

(% of PBT) 22.4 30.9 32.4 27.0 22.5

Reported PAT 61 41 47.1 17 258.2 106 8 1,312.5Adjusted PAT 61 41 47.1 31 98.6 134 11 1,154.1

Adj. PATM 4.6 3.4 2.5 2.7 0.2

Equity capital (cr) 34.2 34.2 34.2 34.2 34.2

Reported EPS (`) 17.8 12.1 47.1 5.0 258.2 31.1 2.2 1,312.5Adjusted EPS (`) 17.8 12.1 47.1 9.0 98.6 39.2 3.1 1,154.1


Top-line grows slightly ahead of estimates: For 4QFY2013, standalone top-linereported a slightly better-than-expected growth of 7.1% yoy (8.8% qoq) to

`1,311cr which was driven by a strong volume growth of 9.3% yoy (11.3% qoq).

The total volumes in tonnage terms for the quarter stood at 59,000MT and were

driven primarily by a strong 24.2% yoy (21% qoq) growth in the OEM segment led

by new partnerships with Hyundai, Royal Enfield, Volvo-Eicher and Bajaj Auto. The

replacement segment however, posted a muted growth of 1.2% as the demand in

the segment remains weak. The sales-mix for 4QFY2013 in the replacement, OEM

and export segments stood at 50%, 25% and 25% respectively as against 54%,

22% and 24% respectively in 4QFY2012. Ceats net average realization in

4QFY2013 registered a decline of 2.2% yoy (2.4% qoq) largely due to adverse

product-mix (higher OEM share in total-mix)..

Ceat operated at capacity utilization levels of ~80% at the Halol plant. The Halol

plant contributed ~16% to total volumes during FY2013.

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May 7, 2013 3

Exhibit 2:Net sales up 7.1% yoy driven strong growth in volumes

998

1,0771,107 1,063

1,224 1,187 1,173 1,2051,311

27.8

38.5

31.4

18.8

22.7

10.3

6.0 13.3

7.1

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.040.0

45.0

0

200

400

600

800

1,000

1,200

1,400

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

(%)(`cr) Net sales (LHS) Net sales growth (RHS)


Operating margin improves further to 10.6%: On the operating front, EBITDAmargins jumped sharply by 218bp sequentially to 10.6% against our expectations

of 8.8%, as raw-material cost as a percentage of sales witnessed a significant

decline of 206bp qoq led by ~8% decline in the natural rubber prices. On a yoy

basis, EBITDA margins expanded marginally by 28bp as benefits of lower natural

rubber prices (down ~16% yoy) were offset by increase in higher employee and

other expenditure (due to increased marketing spends).

Exhibit 3:Average natural rubber price trend

72

98 102119

142

165177

195

225 229211 203

191 193181 174

160

0

50

100

150

200

250

4QFY09

2QFY10

4QFY10

2QFY11

4QFY11

2QFY12

4QFY12

2QFY13

4QFY13

(`/kg)


Exhibit 4:EBITDA margin at 10.6%

1.9 (0.4)5.6 6.2

10.4 8.8 6.7 8.510.6

78.9 80.675.0 74.5

71.0 71.0 71.4 68.8 66.7

(10.0)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

(%) EBITDA margin Raw material cost/sales


Adjusted net profit surges to `61cr: Led by a strong operating performance, netprofit on a sequential basis witnessed a significant growth of 98.6% to `61cr. On a

yoy basis too, net profit posted a strong growth of 47.1% yoy aided by lower

interest expense (due to reduction in debt levels) and lower tax outgo (tax-rate at

22.4% as against 30.9% in 4QFY2012).

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May 7, 2013 4

Exhibit 5:Net profit jumps significantly to `61cr

(12)

(39)

62

41

26

31

31

61

(1.2)

(3.6)

0.50.2

3.4

2.2 2.6 2.5

4.6

(5.0)

(4.0)

(3.0)

(2.0)

(1.0)

0.0

1.0

2.0

3.0

4.05.0

6.0

(60)

(40)

(20)

0

20

40

60

80

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

(%)(`cr) Net profit (LHS) Net profit margin (RHS)


Exhibit 6:Financial performance (Consolidated)Y/E March (` cr) 4QFY13 4QFY12 % chg (yoy) 3QFY13 % chg (qoq) FY2013 FY2012 % chg (yoy)Net Sales 1,346 1,273 5.7 1,249 7.8 5,052 4,653 8.6Consumption of RM 880 881 (0.2) 831 5.8 3,417 3,416 0.0

(% of Sales) 65.4 69.2 66.6 67.6 73.4

Staff Costs 81 61 31.8 73 11.4 283 228 24.4

(% of Sales) 6.0 4.8 5.8 5.6 4.9

Purchase of traded goods 13 10 25.4 22 (40.7) 59 47 25.4

(% of Sales) 1.0 0.8 1.7 1.2 1.0

Other Expenses 228 177 28.5 213 7.3 839 689 21.7

(% of Sales) 16.9 13.9 17.0 16.6 14.8

Total Expenditure 1,201 1,130 6.3 1,138 5.6 4,598 4,379 5.0Operating Profit 145 143 1.1 111 30.6 455 274 66.1OPM (%) 10.7 11.2 8.9 9.0 5.9

Interest 46 55 (17.3) 47 (3.2) 198 196 0.9

Depreciation 20 19 3.4 21 (2.1) 81 73 10.7

Other Income 6 - - 3 67.4 18 22 (20.6)

PBT (excl. Extr. Items) 84 68 23.9 46 82.4 194 27 609.5Extr. Income/(Expense) - - - (14) - (28) (3) -PBT (incl. Extr. Items) 84 68 23.9 33 158.9 167 24 587.7(% of Sales) 6.3 5.3 2.6 3.3 0.5

Provision for Taxation 19 19 1.0 10 91.7 46 6 669.3

(% of PBT) 23.0 28.2 31.1 27.8 24.9

Reported PAT 65 49 32.8 22 189.2 120 18 560.7Adjusted PAT 65 49 32.8 36 79.8 148 21 592.7

Adj. PATM 4.8 3.8 2.9 2.9 0.5

Equity capital (cr) 34.2 34.2 34.2 34.2 34.2

Reported EPS (`) 19.0 14.3 32.8 6.6 189.2 35.1 5.3 560.7Adjusted EPS (`) 19.0 14.3 32.8 10.5 79.8 43.2 6.2 592.7


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May 7, 2013 5

Conference call Key highlights The Management has indicated that the demand environment is expected to

remain muted across all the segments in FY2014.

According to the Management, the softening of natural rubber prices willensure that the companys operating margins remain stable going ahead.

However, there are pressure from the OEMs to reduce prices which is

concerning. The company has slashed the prices by ~2% in March 2013.

Ceat has signed a joint venture (JV) agreement with A K Khan and Company,a Bangladesh based business house, to set up a bias tyre manufacturing

facility in Bangladesh. Ceat will hold 70% in the JV Company. The balance

30% will be held by A K Khan and Company. The JV would entail an

investment of US$67mn (`355cr) towards the new plant and is expected to

commence operations by 2HFY2015. The JV has completed the process ofland acquisition.

The Management is targeting to increase its presence in the higher margintwo-wheeler tyres where there is less competition. The company has managed

to increase its market share in the two-wheeler tyre segment to ~19% from

~14% in 1QFY2013.

Ceat is operating at ~70-75% utilization levels across all its plants. Around 20-25% of the raw-material requirement of Ceat is currently imported. The company reported a 4% yoy growth in net sales to `384cr in FY2013 in its

Sri Lanka operations with EBITDA margins at ~17%. While the volumes

remained mostly flat at 15,000MT; net average realization registered a strong

growth driven by better-product-mix and price increases. EBITDA margin

expansion was led by decline in natural rubber prices. As a result, operating

and net profit reported a strong growth of 39% and 46% yoy to `64cr and

`39cr respectively. The current capacity in Sri Lanka stands at 60TPD. The

exports from Sri Lanka operations account for ~35% of its revenues. The

realization on the exports front is generally lower.

The Management stated that the consolidated debt has been reduced by~270cr in 2HFY2013 and currently stands at `1,038cr.

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May 7, 2013 6

Investment arguments

Tyre industry Set for a structural shift: Currently, manufacturing radial tyres isfar more capital intensive than cross-plys. The investment per tpd for radial

tyres is 3.2x of cross-plys at `6.1cr/tpd. On the other hand, the selling price of

radial tyres is around 20% higher than cross-ply tyres. Taking into account the

difference in capital requirements and the consequent impact on asset

turnover, for interest cost and depreciation to generate a similar RoCE and

RoE, tyre companies would need to earn EBITDA margins of around 21%

compared to around 9% being earned on cross-ply tyres. Thus, higher capital

requirements will help protect margins from upward-bound input costs, as the

business model evolves bearing in mind the final RoE rather than margins.

With the sector set for a structural shift and apparent pricing flexibility, it will

result in an improvement in RoCE and RoE of tyre manufacturers going

forward.

Volume growth to benefit from capacity expansion: Ceat is ramping up itsradial capacity at the Halol plant to 150TPD, which is likely to be fully

operational in FY2015. With the completion of the proposed expansion, the

product mix of truck : non-truck is likely to improve to 55:45, thereby fetching

better margins.

Increasing focus on exports: Ceat has been increasingly focusing on exports,especially the high-margin specialty tyres, in a bid to offset volatility in its

domestic tyre business in the long run.

Outlook and valuationWhile we broadly maintain our revenue and EBITDA margin estimates for Ceat; we

revise our earnings estimates upwards by 12.1%/5.6% for FY2014/15, primarily to

reflect the benefits of lower interest cost going ahead. The company has reduced

its interest burden by ~270cr in 2HFY2013 and the full benefits of this would be

reflected in FY2014. We expect Ceat to post an EPS of `40.8 and `48.5 in FY2014

and FY2015 respectively.

Exhibit 7:Change in estimatesY/E March Earlier Estimates Revised Estimates % chg

FY2014E FY2015E FY2014E FY2015E FY2014E FY2015ENet Sales (` cr) 5,375 6,004 5,325 5,974 (0.9) (0.5)OPM (%) 8.3 8.3 8.4 8.3 5bp (4)bp

Net profit (` cr) 124 157 140 166 12.1 5.6Source: Company, Angel Research

We retain our positive view on Ceat and believe that the company will continue to

benefit from softening of commodity prices and lower debt burden. However,

slowdown in demand due to lower-than-expected pick-up in replacement segment

along with pressures from OEM to reduce prices may adversely impact the

company. At`

119, the stock is trading at attractive valuations of 2.4x FY2015Eearnings. We maintain our Buy rating on the stock with a target price of `170.

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May 7, 2013 7

Key downside risks to our call: Any rise in input costs, increasing competitiveintensity with major players diversifying globally, and lower-than-anticipated

growth in replacement tyre demand pose downside risks to our estimates.

Exhibit 8:One-year forward P/BV band

0

50

100

150

200

250

300

Apr-0

3

Feb-0

4

Dec-0

4

Oct-0

5

Aug-0

6

Jun-0

7

Apr-0

8

Feb-0

9

Dec-0

9

Oct-1

0

Aug-1

1

Jun-1

2

May-1

3

(`) CMP 0.2 0.5 0.8 1.1


Exhibit 9:One-year forward EV/EBITDA band

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Apr-03

Feb-0

4

Dec-04

Oct-05

Aug-0

6

Jun-0

7

Apr-08

Feb-0

9

Dec-09

Oct-10

Aug-1

1

Jun-1

2

May-13

(`cr) EV (` cr) 2.0x 4.0x 6.0x 8.0x


Exhibit 10:Auto Ancillary Recommendation summaryCompany Reco. CMP(`) Tgt. price(`) Upside(%)

P/E (x) EV/EBITDA (x) RoE (%) FY13-15E EPSFY14E FY15E FY14E FY15E FY14E FY15E CAGR (%)

Apollo Tyres* Neutral 100 - - 7.4 6.3 4.4 3.8 18.4 18.2 12.6

CEAT Buy 119 170 43.0 2.9 2.4 2.3 1.9 17.3 17.6 11.3JK Tyre* Buy 116 154 33.3 3.1 2.6 4.1 3.9 16.4 16.6 4.4

Source: Company, Angel Research; Note: *Consolidated

Company background

Ceat, a part of the RPG Group, is amongst the leading tyre manufacturers in the

country with an overall market share of ~12%. The companys manufacturing

facilities are located in Bhandup, Nashik and Halol. The company has an overall

production capacity of around 780TPD (including outsourced). It exports to

countries across Asia, Africa, Europe and America. Exports constitute 22-24% of

Ceat's total volumes. The company has recently acquired the global rights of the

Ceatbrand from Italian tyre maker Pirelli - this will enable the company to expandits global presence. Ceat also operates in Sri Lanka through a JV and has a ~50%

share in Sri Lanka's tyre market.

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Profit and loss statement (Standalone)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013E FY2014E FY2015ETotal operating income 2,807 3,499 4,476 4,881 5,325 5,974% chg 18.6 24.6 27.9 9.1 9.1 12.2

Total expenditure 2,511 3,359 4,229 4,457 4,878 5,481Net raw material costs 1,869 2,594 3,349 3,378 3,662 4,108

Other mfg costs 253 306 381 427 471 534

Employee expenses 190 212 217 269 309 349

Other 200 248 282 383 437 490

EBITDA 296 139 247 425 447 493% chg - (52.9) 77.1 72.0 5.2 10.3

(% of total op. income) 10.5 4.0 5.6 8.8 8.4 8.3

Depreciation & amortization 27 34 70 78 86 91

EBIT 269 105 176 346 361 402% chg - (60.9) 67.7 96.4 4.2 11.2


Interest and other charges 72 100 192 194 177 181

Other income 42 28 29 21 24 27

Recurring PBT 239 33 13 173 208 248% chg - (86.1) (61.3) 1,247.6 20.1 18.9

Extraordinary items (0) (5) 3 28 0 0

PBT (reported) 239 39 10 146 208 248Tax 74 11 2 39 69 82

(% of PBT) 31.0 28.5 22.5 27.0 33.0 33.0PAT (reported) 165 22 8 106 140 166ADJ. PAT 165 28 11 134 140 166% chg - (83.3) (61.2) 1,154.1 4.1 18.9


Basic EPS (`) 48.2 6.5 3.1 39.2 40.8 48.5Adj. EPS (`) 48.3 8.0 3.1 39.2 40.8 48.5% chg - (83.3) (61.2) 1,154.1 4.1 18.9

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Balance sheet statement (Standalone)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013E FY2014E FY2015ESOURCES OF FUNDSEquity share capital 34 34 34 34 34 34Reserves & surplus 594 615 622 712 836 985

Shareholders Funds 629 649 656 747 870 1,020Total loans 654 904 1,071 804 804 804

Deferred tax liability 20 24 22 75 75 75

Other long term liabilities - 1 1 1 1 1

Long term provisions - 8 8 12 12 12

Total Liabilities 1,303 1,586 1,759 1,638 1,762 1,911APPLICATION OF FUNDSGross block 1,256 1,882 2,112 2,115 2,198 2,281

Less: Acc. depreciation 487 520 588 666 751 843

Net Block 769 1,361 1,524 1,449 1,446 1,438Capital work-in-progress 234 107 13 63 66 68

Investments 59 87 74 45 53 57Long term loans and advances - 22 8 118 118 118

Other noncurrent assets - - - 11 11 11

Current assets 1,032 1,222 1,369 1,370 1,558 1,824Cash 140 48 33 81 131 224

Loans & advances 109 126 143 121 138 155

Other 782 1,048 1,192 1,167 1,288 1,445

Current liabilities 790 1,212 1,229 1,418 1,490 1,605

Net current assets 241 10 139 (48) 68 219Total Assets 1,303 1,586 1,759 1,638 1,762 1,911

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Cash flow statement (Standalone)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013E FY2014E FY2015EProfit before tax 239 39 10 146 208 248

Depreciation 27 34 70 78 86 91Change in working capital (260) 131 (144) 235 (66) (59)

Others 343 80 173 (64) - -

Other income (42) (28) (29) (21) (24) (27)

Direct taxes paid (74) (11) (2) (39) (69) (82)

Cash Flow from Operations 233 244 78 334 136 172(Inc.)/Dec. in fixed assets (237) (499) (136) (54) (85) (85)

(Inc.)/Dec. in investments (16) (28) 12 30 (8) (4)

Other income 42 28 29 21 24 27

Cash Flow from Investing (210) (498) (95) (2) (69) (63)Issue of equity - - - - - -

Inc./(Dec.) in loans 9 250 167 (267) - -

Dividend paid (Incl. Tax) 0 16 8 16 16 16

Others (93) (104) (16) - - -

Cash Flow from Financing (84) 162 159 (283) (16) (16)Inc./(Dec.) in cash (61) (92) (15) 48 50 92

Opening Cash balances 202 140 48 33 82 132Closing Cash balances 140 48 33 82 132 224

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May 7, 2013 11

Key ratios

Y/E March FY2010 FY2011 FY2012 FY2013E FY2014E FY2015EValuation Ratio (x)P/E (on FDEPS) 2.5 18.2 38.0 3.0 2.9 2.4P/CEPS 2.2 6.6 5.2 2.2 1.8 1.6

P/BV 0.6 0.6 0.6 0.5 0.5 0.4

Dividend yield (%) 3.4 1.7 0.8 3.4 3.4 3.4

EV/Sales 0.3 0.3 0.3 0.2 0.2 0.2

EV/EBITDA 2.9 8.4 5.5 2.6 2.3 1.9

EV / Total Assets 0.7 0.7 0.8 0.7 0.6 0.5

Per Share Data (`)EPS (Basic) 48.2 6.5 3.1 39.2 40.8 48.5

EPS (fully diluted) 48.3 8.0 3.1 39.2 40.8 48.5

Cash EPS 55.0 18.0 22.8 53.9 65.8 75.1

DPS 4.0 2.0 1.0 4.0 4.0 4.0

Book Value 183.6 189.6 191.7 218.0 254.1 297.8

Dupont AnalysisEBIT margin 9.6 3.0 4.0 7.2 6.8 6.7

Tax retention ratio 0.7 0.7 0.8 0.7 0.7 0.7

Asset turnover (x) 2.8 2.7 2.9 3.1 3.4 3.7

ROIC (Post-tax) 18.5 5.9 8.9 16.1 15.7 16.8

Cost of Debt (Post Tax) 7.7 9.2 15.1 15.1 14.7 15.1

Leverage (x) 0.8 1.0 1.3 1.2 0.8 0.6

Operating ROE 26.8 2.7 0.7 17.3 16.4 17.8

Returns (%)ROCE (Pre-tax) 21.9 7.3 10.5 20.4 21.2 21.9

Angel ROIC (Pre-tax) 24.4 7.2 10.7 22.9 22.9 24.6

ROE 29.6 4.3 1.6 19.1 17.3 17.6

Turnover ratios (x)Asset Turnover (Gross Block) 2.3 2.2 2.2 2.3 2.6 3.0

Inventory / Sales (days) 41 51 47 42 41 41

Receivables (days) 45 45 45 47 47 47

Payables (days) 81 102 98 96 95 91

WC cycle (ex-cash) (days) 14 3 3 (1) (7) (2)

Solvency ratios (x)Net debt to equity 0.7 1.2 1.5 0.9 0.7 0.5

Net debt to EBITDA 1.5 5.5 3.9 1.6 1.4 1.1

Interest Coverage (EBIT / Int.) 3.7 1.0 0.9 1.8 2.0 2.2

7/30/2019 CEAT 4Q FY 2013

12/12


May 7 2013 12

Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com

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decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make

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Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and

trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's

fundamentals.

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Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to thelatest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may haveinvestment positions in the stocks recommended in this report.

Disclosure of Interest Statement CEAT

1. Analyst ownership of the stock No

2. Angel and its Group companies ownership of the stock No

3. Angel and its Group companies' Directors ownership of the stock No

4. Broking relationship with company covered No

Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to -15%) Sell (< -15%)

Note: We have not considered any Exposure below`

1 lakh for Angel, its Group companies and Directors

ceat 4q fy 2013

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