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Ceat Ltd. Investor Presentation 2021

Sep 1, 2021

61454_rns_2021-09-01_41fff5ac-47ca-45e3-b36b-a46a86663ddd.pdf

Investor Presentation

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September 1, 2021

BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001 Security Code: 500878

National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Bandra (East), Mumbai 400 051 Symbol: CEATLTD NCD symbol: CL23, CL25 CP Listed ISIN: INE482A14AH0, INE482A14AI8, INE482A14AJ6, INE482A14AK4, INE482A14AL2, INE482A14AM0

Sub: Investor Conference- Reg. 30

Dear Sir/Madam,

Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find below the details of the Analyst/ Institutional Investors meet which will be participated by the Company along with the presentation to be made at the same:

Date Host Venue/Mode
September 1 and 2, 2021 Elara India Dialogue 2021 Audio / Video conference
September 13 and 15, 2021 Motilal Oswal 17thAnnual Global Investor
Conference, 2021
Audio / Video conference

You are requested to kindly take the same on record and disseminate appropriately.

Thanking you,

Yours faithfully,

For CEAT Limited

Vallari Gupte Company Secretary and Compliance Officer

Encl: As above

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An Group Company

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Q1 FY22 – Investor Presentation | 21[st] July 2021

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Disclaimer

This presentation may include statements which may constitute forward-looking statements. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, business development, market position, expenditures, and financial results, are forward looking statements. Forward looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results, performance or achievements, could thus differ materially from those projected in any such forward-looking statements.

The information contained in these materials has not been independently verified. None of the Company, its Directors, Promoter or affiliates, nor any of its or their respective employees, advisers or representatives or any other person accepts any responsibility or liability whatsoever, whether arising in tort, contract or otherwise, for any errors, omissions or inaccuracies in such information or opinions or for any loss, cost or damage suffered or incurred howsoever arising, directly or indirectly, from any use of this document or its contents or otherwise in connection with this document, and makes no representation or warranty, express or implied, for the contents of this document including its accuracy, fairness, completeness or verification or for any other statement made or purported to be made by any of them, or on behalf of them, and nothing in this document or at this presentation shall be relied upon as a promise or representation in this respect, whether as to the past or the future. The information and opinions contained in this presentation are current, and if not stated otherwise, as of the date of this presentation. The Company undertake no obligation to update or revise any information or the opinions expressed in this presentation as a result of new information, future events or otherwise. Any opinions or information expressed in this presentation are subject to change without notice.

This presentation does not constitute or form part of any offer or invitation or inducement to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of CEAT Limited (the “Company”), nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment therefore. Any person/ party intending to provide finance / invest in the shares/businesses of the Company shall do so after seeking their own professional advice and after carrying out their own due diligence procedure to ensure that they are making an informed decision. This presentation is strictly confidential and may not be copied or disseminated, in whole or in part, and in any manner or for any purpose. No person is authorized to give any information or to make any representation not contained in or inconsistent with this presentation and if given or made, such information or representation must not be relied upon as having been authorized by any person. Failure to comply with this restriction may constitute a violation of the applicable securities laws. The distribution of this document in certain jurisdictions may be restricted by law and persons into whose possession this presentation comes should inform themselves about and observe any such restrictions. By participating in this presentation or by accepting any copy of the slides presented, you agree to be bound by the foregoing limitations.

4-6 7-17 18-26 27-29

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Table of Contents

Section 1: RPG Group Overview Section 2: Business Overview Section 3: Operational & Financial Overview Section 4: Environment, Social and Governance (ESG) Overview

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Section 1: RPG Group Overview

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RPG Grou : Powered b Passion Driven b Ethics p y , y

UNLEASH TALENT TOUCH LIVES OUT PERFORM AND ☺

RPG Enterprises was founded in 1979. The group currently operates in various - industries Infrastructure, Technology, Life Sciences, Plantations and Tyre Manufacturing. The group has a history of business dating back to 1820 AD in banking, textiles, jute and tea. The Group grew in size and strength with several acquisitions in the 1980s and 1990s. CEAT became a part of the RPG Group in 1982, which is now one of India’s fastest growing conglomerates with 30,000+ employees, presence in 100+ countries and annual gross revenues of ~$4 Bn.

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KEC International

World leader in Power Transmission EPC space

CEAT One of India’s leading manufacturer of automobile tyres

Zensar Technologies Software services provider spread across 20 countries, 400+ customers.

RPG Life Sciences Pharma company with wide range medicines in global generics and synthetic APIs.

Raychem RPG

Engineering products and services catering to infrastructure segment of the economy.

Harrisons Malayalam

One of India’s largest plantation companies with tea, rubber and other agro products.

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RPG Grou : Ke Financials p y

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FY17-21 CAGR:
EBITDA PAT
EBITDA 10.1%
3,006
PAT 8.9%
2,594
2,423
2,218
2,045
1,377
980 1,031 1,099 1,111
FY17 FY18 FY19 FY20 FY21
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FY17-21 Gross Total Income (Rs Cr.) FY17-21 CAGR: EBITDA PAT
CAGR: 7.0% EBITDA 10.1%
3,006
PAT 8.9%
26,269
24,682 2,594
23,833 2,423
21,766 2,218
20,052 2,045
1,377
980 1,031 1,099 1,111
FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21
Market Cap
Net Worth ROE ROCE
12,000.00 40.0% 26,923
9,786 35.0%
10,000.00
8,441
30.0%
7,775
8,000.00 6,925
25.0%
6,066
6,000.00 16.2% 14.9% 14.1% 14.1% 20.0% 10,637
13.2%
15.0%
4,000.00 8,431
10.0%
13.5%
2,000.00 12.3% 12.0% 11.0% 10.7% 5.0% 5,768
- 0.0%
Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21Mar-21 Apr-21 May-21 Jun-21 Jul-21
FY17 FY18 FY19 FY20 FY21
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26,923
10,637
8,431
5,768
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Note:

Group CEAT KEC ZENSAR

  • 1) ROCE is calculated by taking EBIT*(1-ETR) divided by Capital Employed

  • 2) ROE is calculated by taking PAT divided by Net-worth

  • 3) Market Cap updated till 19[th] July 2021

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Section 2: Business Overview Section 4: Business Overview

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Board of Directors

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Harsh Vardhan Goenka Chairman, Non Executive Director

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Anant Goenka Managing Director

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Arnab Banerjee COO and Whole Time Director

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Atul C. Choksey Non Executive Independent Director

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Pierre E. Cohade Non Executive Non Independent Director

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Haigreve Khaitan Non Executive Independent Director

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Mahesh S. Gupta Non Executive Independent Director

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Paras K. Chowdhary Non Executive Independent Director

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Ranjit Pandit Non Executive Independent Director

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Vinay Bansal

Non Executive Independent Director

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Priya Nair Non Executive Independent Director

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Leadershi Team p

Anant Goenka

Kumar Subbiah

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Chief Financial Officer

Managing Director

Dilip Modak

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Senior Vice President – Manufacturing

Arnab Banerjee

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Chief Operating Officer

Saurav Mukherjee

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Senior Vice President – Global Sales

Milind Apte

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Senior Vice President – Human Resources

Peter Becker

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Senior Vice President – R&D and Technology

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Overview

India’s leading tyre company with over 60 yrs of presence

Distribution Network : 4,100+ dealers, 300+ exclusive CEAT franchisees

7 Manufacturing facilities - Bhandup, Nasik, Halol, Nagpur, Ambernath, Chennai & Sri Lanka

100+ countries where products are sold with strong brand recall

#No 1 player in Sri Lanka in terms of market share

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FY21 Revenue Breakup by Product
Specialty, 7% (5%)
Truck and
Farm, 7% (6%)
Buses, 34%
(32%)
Passenger Cars /
UV, 14% (14%)
LCV, 9% (12%)
2/3 wheelers,
29% (32%)
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FY21 Revenue Breakup by Market

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Exports, 14% (14%)
OEM, 21%
(27%)
Replacement
, 65% (59%)
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  1. Consolidated revenue breakup

  2. Corresponding figures in investor presentations till Q4 FY19 had standalone revenue break-up

  3. Figures in parenthesis denote FY20 consolidated Revenue (post CSTL merger) break-up

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Strate gy

OEM Relationships

Differentiated Product

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World Class R&D

Strong Brand Extensive Distribution Global Reach

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1 Differentiated Products

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Strengthening OEM Relationships

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Key developments

Focus on OEM, recent entries in new models – Ashok Leyland Ecomet, Okaya EV Scooter, Hero MotoCorp Splendor iSmart (BSVI), Hero MotoCorp HF Deluxe (BSVI), Hero Glamour Refresh, Mahindra Jeeto Z Series, Nissan Magnite, Renault Kiger, Mahindra Perak, Mahindra Thar

Recent entries into OEM’s existing models – Honda Bikes till 125 CC, Yamaha FZ 150 CC, Suzuki Gixxer 150 CC, Ashok Leyland Truck 1618, Daimler BSVI Trucks, Piaggio Aprilia 150 CC, Hyundai i20

Platforms like Fuelsmart, Gripp, Mileage X3, SecuraDrive, Vardhan etc.

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2 Stron Brand g

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Launch of New Range of Tyres for Compact SUVs

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Warranty Extension in wake of Covid 2[nd] wave / lockdowns

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CEAT Blog – Tyre Tips and Advice

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Monsoon Campaigns

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3 Extensive Distribution

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CEAT Shoppe

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4,100+ Dealers & Channel Partners

300+ CEAT Shoppes

Shop in Shop (SIS)

CEAT Bike Shoppe

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290+ Distributors

40,000+ Sub-dealers

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CEAT Truck Service Hub

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580+ Districts

180+ Shop In Shops

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4 Deep OEM Partnerships

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TATA Motors Ashok Leyland VECV Escorts AMW TAFE
Mahindra Daimler Eicher SML Isuzu JBM Group
Maruti Suzuki TATA Motors Mahindra Renault Hyundai KIA Nissan
Force Motors Datsun Skoda Peugeot Volkswagen Morris Garage
Honda Royal Enfield Bajaj Yamaha Suzuki Hero Hero Electric
Piaggio LML Tork Tunwal Okinawa Scooters Kawasaki
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5 World Class R&D

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State-of-the-Art R&D Center, Halol

R&D Office, Germany

▪ Significant investment on tyre testing infrastructure like Anechoic Chamber, Flat Track Test Machine

▪ Focus on upcoming technologies like Electric Vehicle, Sustainability and Smart Tyres

  • 100+ patent filings till date

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6 Ex andin Global Reach p g

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Key Export Clusters
Emerging markets
Europe Cluster
US Cluster
Middle East
Cluster
Far East 1 Cluster
Far East 2 Cluster
LATAM
Cluster
Africa
Cluster
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Exports to 90+ Countries in 7 clusters ▪ Sri Lanka: Manufacturing facility and Leadership position in the market and with 50+% market share ▪ Focused product and distribution strategy for select clusters and countries

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Section 3: Operational & Financial Section 5: Operational & Financial Overview Overview

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Q1 FY22 Operational Highlights

New Initiatives

Tyre Stop, a premium and futuristic retail format for Tier 2&3 cities

Approval for Olectra EV Bus

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Revamped website with new features - Pick up at store, Home delivery, AI based warranty registration, Cricket Accessories

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Awards and Recognition

Mint Business Transformation Award for CEAT Fleet Solutions

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Recognized among India’s top 35 best companies to work for by GPTW institute

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Consolidated: Q1 FY22 Financial Highlights

Q1 FY22 v/s Q4 FY21 (Q-o-Q)

Q1 FY22 v/s Q1 FY21 (Y-o-Y)

  • Net revenue from declined by 16.7% to INR 1,906 Crs

▪ Net revenue from operations grew by 70.2% to INR 1,906

from INR 2,290 Crs

Crs from INR 1,120 Crs

  • Gross margin contracted to 38.9% from 42.0%

  • Gross margin contracted to 38.9% from 40.3%

  • EBITDA stood at INR 173 Crs compared to INR 269 Crs;

  • EBITDA stood at INR 173 Crs compared to INR 105 Crs;

margins at 9.1% from 11.7%

margins at 9.1% from 9.4%

  • PAT stood at INR 23 Crs compared to INR 153 Crs

  • PAT stood at INR 23 Crs compared to -ve INR 35 Crs

  • Debt / equity at 0.53x compared to 0.42x

  • Debt / equity at 0.53x compared to 0.69x

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Consolidated: Financial Trends

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7,610
6,985
6,779
6,283
5,722
Net Sales
(INR Cr)
1,906
FY17 FY18 FY19 FY20 FY21 Q1 FY22
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13.4% 16.0%
14.0%
12.0%
10.2% 10.9% 1,019 9.1% 12.0%
9.5% 10.0% EBITDA (INRCr)
741 8.0%
638 663
685 6.0%
EBITDA to Net
4.0%
Sales %
173 2.0%
0.0%
FY17 FY18 FY19 FY20 FY21 Q1 FY22
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Note

All figures are per IND AS

Company’s investment in Sri Lanka JV is accounted using Equity method EBITDA includes profit from Sri Lanka JV; EBITDA does not include Non-operating income

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Consolidated: Financial Trends

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500 9.0%
450 8.0%
400 6.3% 5.7% 7.0%
350
6.0%
300
3.6% 5.0% PAT (INR Cr)
250 3.7% 3.4%
200 432 4.0%
361 3.0%
150 PAT to Net Sales%
100 233 251 230 1.2% 2.0%
50 23 1.0%
- 0.0%
FY17 FY18 FY19 FY20 FY21 Q1 FY22
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Notes

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All figures are per IND AS

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Consolidated: Q1 FY22 Financials

Parameter
Net Revenue from operations
Raw Material
Gross margin
Gross margin %
Employee Cost
Other Expenses
EBITDA
EBITDA %
Finance Cost
Depreciation
Operating PBT
Exceptional expense
Non-Operating income
PBT
PAT
Q1 FY21
1,120.2
669.3
450.9
40.3%
151.3
197.6
105.5
9.4%
48.8
78.5
(21.8)
21.8
2.8
(40.8)
(35.2)
Q4 FY21
2,289.7
1,328.3
961.5
42.0%
182.6
518.0
268.7
11.7%
39.9
89.9
138.9
-
3.2
142.1
153.0
Q1 FY22
1,906.4
1,164.3
742.1
38.9%
177.9
398.1
173.2
9.1%
46.0
96.5
30.7
-
3.9
34.6
23.1
QoQ
-17%
-12%
-23%
(306) bps
-3%
-23%
-36%
(265) bps
15%
7%
-78%
NA
23%
-76%
-85%
All figures in INR Cr
YoY
70%
74%
65%
(132) bps
18%
101%
64%
(33) bps
-6%
23%
NA
-100%
38%
NA
NA

Notes

Figures are as per IND AS

Company’s investment in Sri Lanka JV is accounted using Equity method under IND AS which was earlier consolidated using proportionate consolidation method Gross margin includes impact of non-material cost movement of inventory (FG + SFG) EBITDA includes profit from Sri Lanka JV

EBITDA does not include Non-operating income

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Consolidated: Leverage / coverage Profile

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Total Debt
(INR Cr)
Debt breakup
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2,000 924 872 1,498 1,929 1,418 1,785
1,800 1,693
1,600 LT Debt (INR Cr)
1,431
1,400 1,274
1,200 1,397
1,000 ST Debt (INR Cr)
800 0.66
866 676 0.54 0.53
600 0.42
0.38
0.33
400
D/E
200 196 224 236 21 355
0 58
FY 17 FY18 FY19 FY20 FY21 Q1 FY22
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Note
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1,019
663 741 EBITDA (INR Cr)
685
638
8.4 5.8
7.5 4.9
6.6
Debt / EBITDA (x)
2.6
2.3 173
1.4 1.4
1.3
EBITDA / Interest (x)
FY 17 FY18 FY19 FY20 FY21 Q1 FY22
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EBITDA / Interest (x)
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All figures are per IND AS Debt numbers are on Gross basis

Company’s investment in Sri Lanka JV is accounted using Equity method EBITDA includes profit from Sri Lanka JV; EBITDA does not include Non- operating income Long Term debt also includes the ‘Current Maturities’ component of the long-term debt

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Standalone: Q1 FY22 Financials

Parameter
Net Revenue from operations
Raw Material
Gross margin
Gross margin %
Employee Cost
Other Expenses
EBITDA
EBITDA %
Finance Cost
Depreciation
Operating PBT
Exceptional expense
Non-Operating income
PBT
PAT
Q1 FY21
1,116.2
669.6
446.5
40.0%
149.2
195.6
101.7
9.1%
48.3
78.5
(25.1)
21.8
14.9
(32.0)
(25.9)
Q4 FY21
2,279.0
1,325.9
953.1
41.8%
180.6
517.2
255.3
11.2%
39.2
89.9
126.2
-
3.1
129.4
141.8
Q1 FY22
1,897.8
1,163.8
733.9
38.7%
175.3
393.2
165.5
8.7%
45.3
96.5
23.8
-
3.9
27.7
20.0
QoQ
-17%
-12%
-23%
(315) bps
-3%
-24%
-35%
(248) bps
15%
7%
-81%
NA
23%
-79%
-86%
All figures in INR Cr
YoY
70%
74%
64%
(133) bps
17%
101%
63%
(39) bps
-6%
23%
NA
NA
-74%
NA
NA

Notes

Financials are as per IND AS

Gross margin includes impact of non-material cost movement of inventory (FG + SFG) EBITDA does not include Non-operating income

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E uit Shareholdin & Price trends q y g

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Share Price (INR) Total Volume
2,000 40,00,000
35,00,000
1,500 30,00,000
25,00,000
1,000 20,00,000
15,00,000
500 10,00,000
5,00,000
- -
Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21
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Source : Stock Exchange. The above data is updated till 31[st] December 2020

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Shareholding Pattern as on
June 30, 2021
Promoters
15.5%
FII/FPI
4.2%
Mutual Funds 9.1% 46.8%
Ins., Fin. Inst. & Other
Corp.
Public/Others 24.4%
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Market Information
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▪ Market Price (20 July, 2021): INR 1,399.70/share

▪ Face Value : INR 10/share

▪ Market Cap (20 July, 2021): INR 5,662 Cr

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Section 4: Environment, Social, Section 5: Operational & Financial Governance (ESG) Overview Overview

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CEAT’s Sustainabilit Goal y

Manufacturing

✓ Using briquette as fuel

✓ Plant electricity through rooftop / captive solar plants

Materials

  • ✓ Greener raw materials; recycled crumb rubber

✓ ESG compliant vendors

Reduce Carbon Footprint by 50% by 2030

Transportation

✓ Network optimization

Product Use

End of Life

  • ✓ High recycling and recovery rates

  • ✓ Light weight tyres

  • ✓ Low rolling resistance

  • ✓ Increased retreadability

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CEAT’s Initiatives

Commitment to Environment

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  • ✓ Rooftop solar commissioned at Nagpur and Ambernath factories

  • ✓ IGBC (Indian Green Building Council) Green Building Platinum Certification received for Nagpur and Chennai plant buildings

  • ✓ Tied-up with TATA Power to setup a 10 MW solar plant in Maharashtra for our Bhandup plant energy requirement

Diversity and Inclusion

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  • ✓ Promoting diversity and inclusion across roles and demographics

  • ✓ 28% female workforce at Chennai facility. Target to reach 40%

  • ✓ CEAT Swayam program for training Women Drivers

Commitment to Society

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  • ✓ Donated 8 Fever Clinics (fully functional cabins with consultation, testing/collection, medicine dispensing facilities) across Rural and Semi Urban Maharashtra. Overall, 25 Fever clinics planned

  • ✓ Several other initiatives around supply of oxygen tanks, concentrators and other healthcare equipment

T H A N K Y O U