Thread by @tycoonmindset05

Ceat Ltd conference call was today at 4:00 pm.

"Good Replacement demand as preference is being given to personal mobility"

Here are the Key takeaways of the call😀👇

- Ceat has 3400+ dealers and 300+ exclusive franchise.

- There was strong replacement demand and pent up demand.

- replacement demand grew by over 35%.

- Overall raw material price increased.

- Took a price hike to mitigate the increase in raw material price.

- Plant utilization is at high levels and new facilities ramping up well.

-In the Current quarter Ceat continued to invest in advertising with there sports partnerships

- demand scenario continues to be strong. OEM, 2 wheeler demand is little slow.

- For the next 6-9 months time frame company is very positive in respect to demand in every category.

- About 500 crore project capex is planned this year, out of which 250 crore is already done. Project capex is over and above maintenance capex.

- Both raw materials, crude and rubber, price have gone up.

- There was a 3% increase in price, in the month of December, across category except 2 wheeler.

- There was no inventory accumulation. Inventory levels are uncomfortably low. Generally inventory of 1 month is kept but now it is less.
If the company had more inventory they could have sold more.

- Company will have to take another 3% price hike to cater to the increase in prices of the raw material.

- Maintenance capex of 150 crore is done every year.

- Replacement has been strong as there was a personal mobility demand among people and rural has been strong as well.

- CV segment has also grown very well.

- In 2 wheelers segment there are hardly any import.

- Next 9 months looks good because of low base effect.

- Company does not want to overprice the products as compared to competitors.

- As volume is growing, company needs to employ more people. Company keeps provision to pay bonus and some employee incentives.

- Price increase has not been sufficient so to make up with the raw material price some price hike is required.

- Overall industry had enough supply to cater to the demand. company has been short of supply in some categories.

- People are using personal vehicles more, so more replacement demand.

- Debt level came down by 370 crores since the beginning of the year, working capital debt also came down by 300 crore.

- Project capex of 250 crore is done till now.

- As company does capex, keeping in mind cash levels, additional debt will be taken as and when required. Current debt levels are not the peak debt levels.

- On average there is positive growth in volume demand.

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