Though CEAT’s volume dropped by 7.5% in the first half of the current fiscal year, the full year volume may grow by 4-5% given the current demand scenario.
A few factors would help in sustaining the demand in the coming quarters.
Tyre maker CEAT is among the few companies in the auto ancillary sector which is likely to report profit growth for FY21 following a strong demand from the high margin replacement business. Its stock has outperformed the benchmark index by 26% over the past three months. The momentum is expected to sustain in the medium term given that an expected earnings growth of 10-12% for the current fiscal year may arrest the deterioration in the company’s