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CEAT took an average price hike of 1

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Canada Goose Outlet CEAT posted a mixed canada goose coats on sale set of numbers for Q2 FY19. While the top line continues to witness a strong growth, its operating profitability continues to be under pressure on the back of rise in raw material (RM) prices, employee cost and other operating expenses. Canada Goose Outlet

canada goose black friday sale We believe the company is poised to canadian goose jacket gain from an increase in market share in passenger vehicle (PV) and 2/3 Wheeler segments and capacity expansion in selected pockets. The volume growth was led canada goose by canada goose clearance growth coming in from both original equipment manufacturer (OEM) and cheap Canada Goose export market demand. Realisation buy canada goose jacket witnessed a YoY growth of 2.8 percent on the back of favorable mix titled towards replacement and passenger tyres and the price hike taken by the company. canada goose black friday sale

canada goose clearance sale In terms of operating profitability, earnings before interest, tax, depreciation and amortization (EBITDA) witnessed a decline of 8.8 percent (YoY) on the back of significant increase in operating expenses (higher ad expenses) and employee cost (increase in salaries, new employee cost and one time expense of Rs7 10 crore because of a settlement with workers in Bhandup and Nasik). This led to YoY EBITDA margin contraction of 239 bps. canada goose clearance sale

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cheap Canada Goose Tyre companies have, historically, been unable to pass on the full rise in the raw material (RM) prices to the customers, leading to huge margin pressure. However, the company has started passing on the rise in RM prices to its customer without significantly denting its volume. CEAT took an average price hike of 1.7 percent in Q2 FY19 and took another 2 percent in trucks and 4 percent hike in two wheeler (2W) in October 2018, which should get reflected in next quarter’s result. These price hikes should help the company in maintaining its operating margin. cheap Canada Goose

canada goose uk outlet The management expects that RM inflation to continue canada goose clearance sale and expects RM price to rise 3.5 percent on quarter on quarter (QoQ) canada goose store basis in Q3 FY19 and indicates that further price hike needs to be taken to pass on the same. canada goose uk outlet

canadian goose jacket Areas to drive growth passenger vehicle segmentThe company caters to clients across all segment. However, its dependence on truck and busses Canada Goose Outlet is much higher (contributed 35 percent in sales in H1 FY19). In light of this, to reduce dependence from truck segment, the canada goose deals management has identified passenger vehicle (PV) and 2/3W segments as a focus areas to drive the growth for the company as these have the ability to boost margins for the company. The company is scaling up its operations in these areas. And Canada Goose sale has lowered it to Rs1,000 1,500 crore from Rs1,500 1,700 crore over the current fiscal. canadian goose jacket

Canada Goose Coats On Sale CEAT has been facing supply constraints in 2W and hence It plans to incur capex to increase 2W capacity to 3 million units from 2 million units currently in next 1 1.5 years. Further, new plant in Nagpur is on track to put up capacity of 80,000 units for TBR (truck and bus radial) and expects it to commence from Q4 of this fiscal year. Canada Goose Coats On Sale

Canada Goose sale Additionally, de bottlenecking at PCR (passenger car radial) capacity is being done which Canada Goose online has led to 10 12 percent increase in the capacity with a further scope for 10 percent Canada Goose Parka in second half of the current fiscal. Canada Goose sale

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buy canada goose jacket Recent volatility in overall market and concerns over rise in RM prices have led the stock to correct by 44 percent from its 52 week high. The correction has led to significant drop in the valuations of the company. canada goose outlet CEAT is currently trading at 17.9 times and 13.9 times FY19 and FY20 projected earnings considering the likely increase in interest expense and depreciation owing to the big capex plan. buy canada goose jacket

canada goose coats We have comfort on CEAT’s strategy buy canada goose jacket cheap and business and valuation is also reasonable. We advise investors to accumulate this business for long term on any weakness arising out of weak demand outlook Canada Goose Jackets and/or rise in RM prices canada goose coats.

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