CEAT Q1 FY27 net profit falls 96% to Rs 4 crore

CEAT Limited reported consolidated Q1 FY27 net profit of Rs 4 crore on 17 July, down 96 percent from Rs 112 crore, and the stock fell 7.3 percent that day. Q1 FY27 numbers (consolidated): - Revenue: Rs 4,318 crore, up 22.3% YoY from Rs 3,529 crore - EBITDA: Rs 370 crore; margin 8.6% vs 11.0% a year ago - Gross margin: 33.9% against 40 to 41% in normal times - PAT: Rs 4 crore vs Rs 112 crore; standalone Rs 98 crore vs Rs 135 crore - Rs 48 crore Sri Lanka rupee loss on a subsidiary's $80 million debt Raw material costs rose 16 to 18 percent over Q4 on the West Asia conflict. Replacement prices are up about 11 percent; management guides a further 8 to 10 percent input cost rise in Q2 and continued margin pressure. CEAT [][***** shares closed at Rs 3,236.68 on 1 October on StockGro (NSE Rs 3,287), 25.9 percent below the NSE 52-week high. P/E 22.21; sector P/E 19.69. My view: hold, not a fresh entry. Add back the Rs 48 crore loss and PAT is at most Rs 52 crore, still down 54 percent on 13 to 14 percent standalone volume growth: cost, not demand. The 22x P/E flatters: only about Rs 1 of the Rs 145.76 trailing EPS is Q1. If Q2 repeats Q1, Q2 FY26's Rs 185.7 crore (about Rs 46 a share) drops out, trailing EPS falls to about Rs 101 and the P/E rises to about 32. Holders stay into Q2 results (date not yet out; last year 17 October). Fresh money waits for a Q2 EBITDA margin of 11 percent or better, Q1 FY26's level. Resistance Rs 3,550 (17 July close); no sourced support before the NSE 52-week low, Rs 3,061.20. My exit is a close below that or a Q2 margin under 8.6 percent. Disclosure: Vijay Kumar Gupta, SEBI Registered Research Analyst, INH000020226, Vijay Gupta Advisory. SEBI registration and NISM certification do not guarantee performance or assure returns. Securities markets are subject to market risks. No holdings in the subject company.