CEAT Ltd shares surged over 11% after the tyre maker reported strong performance in the September quarter, exceeding market expectations. The remarkable performance can be attributed to lower raw material costs, healthy volume growth, and the company’s improving product mix.

In the Q2 numbers for the current financial year, the company’s consolidated net profit grew by 3125% year-on-year (YoY) or nearly 26 fold to Rs 208 crore as against a net profit of Rs 6.4 crore in the corresponding quarter last year. 

The revenue from operations in Q2FY24 reached Rs 3,053.3 crore, up 5.5% from Rs 2,894.5 crore in the previous fiscal’s September quarter. The cost of raw materials consumed in the September 2023 quarter decreased 11.4% YoY to Rs 1,729.8 crore compared to the previous year’s figure of Rs 1,953.3 crore for the same quarter.

The company’s management said that demand remained stable with mid-single-digit growth in the top line, with the margin more than doubling from the corresponding period a year ago. 

Shares of CEAT Ltd snapped their three-day losing streak on Tuesday, closing 5.9% higher at Rs 2,226. The stock touched an intraday high of Rs 2,337, up 11.1% from the previous closing price on the National Stock Exchange (NSE).