3QFY2013 Result Update | Auto Ancillary

February 8, 2013

CEAT
Performance Highlights
Quarterly highlights (Standalone)
Y/E March (` cr) Net Sales EBITDA EBITDA margin (%) Adj. PAT
Source: Company, Angel Research

BUY
CMP Target Price
Investment Period
3QFY12 1,063 66 6.2 2 % chg (yoy) 13.0 54.5 227bp 1,180 2QFY13 1,173 78 6.7 17 % chg (qoq) 2.4 30.1 180bp 82

`103 `163
12 Months

3QFY13 1,202 102 8.5 31

Stock Info Sector Market Cap (` cr) Net Debt (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Tyre 354 1,007 0.8 125/82 81,451 10 19,485 5,904 CEAT.BO CEAT@IN

Ceat reported better-than-expected performance in 3QFY2013 driven by sharp improvement in operating margins, largely due to the receding cost pressures. The top-line growth on a sequential basis was however modest on account of the demand slowdown in the automotive industry. During the quarter, Ceat recorded an exceptional expense of `14cr related to the VRS scheme announced for the employees at the Bhandup plant. Around 188 employees opted for the VRS scheme during the quarter. We retain our positive view on Ceat and believe that the company will continue to report a strong performance led by steady ramp-up at the Halol plant and stable raw-material pricing environment. However slowdown in OEM demand remains a concern. Nevertheless, due to attractive valuations we maintain our Buy rating on the stock. Strong performance for 3QFY2013: For 3QFY2013, the standalone top-line posted an in-line growth of 2.4% qoq to `1,202cr driven by 3.9% growth in volumes to ~53,000MT. On a yoy basis though, the top-line grew by a strong 13% led by volume growth of 15.2%. The yoy growth appears strong due to low base of 3QFY2012 which was impacted by a 23-day strike at the Nashik plant. The net average realization, however, was down by 1% yoy (1.2% qoq) primarily due to unfavorable product-mix (larger share of OEMs in the volume mix). On the operating front, EBITDA margins surged substantially by 180bp qoq (227bp yoy) to 8.5% against our expectations of 7.9%, as raw-material cost as a percentage of sales witnessed a decline of 210bp qoq (470bp yoy) led by correction in natural rubber prices. However on a yoy basis, employee cost (due to onetime gratuity payment of `6.5cr) and other expenditure as a percentage of sales increased by 100bp and 140bp respectively. Led by strong operating performance, the adjusted net profit jumped 82.2% qoq to `31cr. Outlook and valuation: At `103, the stock is trading at an attractive valuation of 2.5x FY2014E earnings. We retain our Buy rating on the stock with a target price of `163, valuing the stock at 4x FY2014E earnings.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 52.9 18.2 1.5 27.4

Abs. (%) Sensex CEAT

3m 3.4 (4.9)

1yr 10.0 19.4

3yr 22.3 (24.4)

Key financials (Standalone)

Y/E March (` cr) Net Sales % chg Net Profit % chg EBITDA (%) EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

FY2011 3,499 24.6 28 (83.3) 4.0 8.0 15.9 0.5 4.3 7.3 0.3 8.1

FY2012 4,472 27.8 10 (64.8) 5.6 2.8 46.9 0.5 1.5 10.9 0.3 5.2

FY2013E 4,822 7.8 102 951.1 8.2 29.8 3.5 0.5 14.5 17.1 0.3 3.3

FY2014E 5,403 12.0 140 37.0 8.3 40.8 2.5 0.4 17.0 18.8 0.2 2.8

Yaresh Kothari
022-3935 7800 Ext: 6844 yareshb.kothari@angelbroking.com

Please refer to important disclosures at the end of this report

CEAT | 3QFY2013 Result Update

Exhibit 1: Financial performance (Standalone)

Y/E March (` cr) Volume (MT) Net Sales Consumption of RM (% of Sales) Staff Costs (% of Sales) Purchase of traded goods (% of Sales) Other Expenses (% of Sales) Total Expenditure Operating Profit OPM (%) Interest Depreciation Other Income PBT (excl. Extr. Items) Extr. Income/(Expense) PBT (incl. Extr. Items) (% of Sales) Provision for Taxation (% of PBT) Reported PAT Adjusted PAT Adj. PATM Equity capital (cr) Reported EPS (`) Adjusted EPS (`)
Source: Company, Angel Research

3QFY13 53,000 1,202 803 66.8 74 6.1 23 1.9 200 16.7 1,100 102 8.5 47 20 3 39 (14) 25 2.1 8 32.4 17 31 2.5 34.2 4.9 8.9

3QFY12 46,000 1,063 766 72.1 54 5.1 14 1.3 163 15.3 997 66 6.2 49 19 5 4 4 0.3 1 32.3 2 2 0.2 34.2 0.7 0.7

% chg (yoy) 15.2 13.0 4.8 36.4 58.6 23.1 10.3 54.5 (4.3) 6.2 (32.9) 996.9 609.9 613.2 608.4 1,179.9

2QFY13 51,000 1,173 816 69.6 70 6.0 15 1.3 194 16.5 1,095 78 6.7 50 20 9 18 (14) 4 0.3 1 32.8 3 17 1.4 34.2

% chg (qoq) 3.9 2.4 (1.6) 5.2 48.5 3.4 0.5 30.1 (6.1) 2.0 (62.4) 113.6 512.7 506.7 515.6 82.2

9MFY13 155,500 3,562 2,443 68.6 206 5.8 52 1.5 577 16.2 3,277 285 8.0 149 59 18 95 (28) 67 1.9 22 32.5 45 73 2.1 34.2

9MFY12 148,100 3,247 2,432 74.9 170 5.2 40 1.2 482 14.8 3,124 123 3.8 138 52 20 (47) (3) (50) (1.5) (16) 32.5 (34) (31) (0.9) 34.2 (9.9) (9.0)

% chg (yoy) 5.0 9.7 0.5 20.9 29.6 19.7 4.9 131.4 7.9 13.4 (10.3) -

608.4 1,179.9

0.8 4.9

515.6 82.2

13.3 21.4

Top-line grows by 13% yoy on a low base: For 3QFY2013, the standalone top-line registered an in-line growth of 13% yoy to `1,202cr led by a volume growth of 15.2% yoy to ~53,000MT. The yoy growth appears strong due to the low base of 3QFY2012 which was impacted by a 23-day strike at the Nashik plant. On a sequential basis though, the top-line posted a modest growth of 2.4% driven by 3.9% growth in volumes. The net average realization however registered a decline of 1% yoy (1.2% qoq) primarily due to unfavorable product-mix (larger share of OEMs in the volume mix). During 3QFY2013, Ceat operated at capacity utilization levels of 85-90% across its plants. The capacity at the Halol plant has been ramped up to 110TPD from ~90TPD in 2QFY2013. Ceat now plans to ramp-up to the full capacity levels of 150TPD by the end of 2QFY2014. The Halol plant contributed 16% to total volumes during the quarter (15% in 2QFY2013).

February 8, 2013

CEAT | 3QFY2013 Result Update

Exhibit 2: Modest growth in top-line on a sequential basis

(` cr) 1,400 1,200 1,000 800 600 400 200
25.2

Net sales (LHS) 1,077

38.5

Net sales growth (RHS) 1,063 1,222 1,187 1,173 1,202

(%) 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0

895

998

1,107

27.8

31.4 22.5 18.8 10.3 6.0 13.0

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

Source: Company, Angel Research

Operating margin improves to 8.5%: On the operating front, EBITDA margins surged substantially by 180bp qoq (227bp yoy) to 8.5% against our expectations of 7.9%, as raw-material cost as a percentage of sales witnessed a decline of 210bp qoq (470bp yoy) led by correction in natural rubber prices. As a result, operating profit surged 30.1% sequentially to `102cr. On a yoy basis, margins improved by a strong 227bp as raw-material expense as a percentage of sales declined by 468bp. However, employee cost and other expenditure as a percentage of sales increased by 100bp and 140bp respectively. The employee cost was higher on account of the one-time gratuity payment of `6.5cr to the employees.

Exhibit 3: Average natural rubber price trend

(`/kg) 250 200 150 100 50 0
78 98 102 72 142 119 165 177 195 225 229 211 203 191 193

Exhibit 4: EBITDA margin improves sharply to 8.5%

(%) 90.0 80.0
181 174

74.0

78.9

EBITDA margin 80.6 75.0

Raw material cost/sales 74.5 71.2 71.0 71.4 68.7

70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 3.8 1.9 (0.4) 5.6 6.2 10.6 8.8 6.7 8.5

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

3QFY09

1QFY10

3QFY10

1QFY11

3QFY11

1QFY12

3QFY12

1QFY13

3QFY13

(10.0)

Source: Company, Angel Research

Source: Company, Angel Research

Adjusted net profit at `31cr: During the quarter, Ceat recorded an exceptional expense of `14cr related to the VRS scheme announced for the employees at the Bhandup plant. Around 188 employees opted for the VRS scheme during the quarter. Adjusted for the exceptional expense, net profit registered an 82% qoq growth to `31cr mainly due to margin expansion at the operating level.

February 8, 2013

3QFY13

CEAT | 3QFY2013 Result Update

Exhibit 5: Adjusted net profit at `31cr

(` cr) 50 40 30 20 10 0 (10) (20) (30) (40) (50) Net profit (LHS) Net profit margin (RHS) 41 3.4 (1.2) (39) 0.5 6 0.2 2 26 2.2 31 2.6 31 2.5 (%) 4.0 3.0 2.0 1.0 0.0 (1.0) (2.0) (3.0) (3.6) (4.0)

0.6 5

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

(12)

Source: Company, Angel Research

Exhibit 6: Financial performance (Consolidated)

Y/E March (` cr) Net Sales Consumption of RM (% of Sales) Staff Costs (% of Sales) Purchase of traded goods (% of Sales) Other Expenses (% of Sales) Total Expenditure Operating Profit OPM (%) Interest Depreciation Other Income PBT (excl. Extr. Items) Extr. Income/(Expense) PBT (incl. Extr. Items) (% of Sales) Provision for Taxation (% of PBT) Reported PAT Adjusted PAT Adj. PATM Equity capital (cr) Reported EPS (`) Adjusted EPS (`)
Source: Company, Angel Research

3QFY13 1,245 828 66.5 77 6.2 22 1.7 208 16.7 1,135 111 8.9 47 21 3 46 (14) 33 2.6 10 31.1 22 36 2.9 34.2 6.6 10.5

3QFY12 1,108 801 72.3 57 5.1 12 1.1 170 15.3 1,040 68 6.2 50 19 11 10 0 10 0.9 2 22.6 8 8 0.7 34.2 2.3 2.3

% chg (yoy) 12.4 3.4 35.6 77.5 22.3 9.1 61.9 (4.8) 6.3 (68.2) 352.2 0.0 218.5 337.7 183.7 356.4

2QFY13 1,223 849 69.4 73 6.0 12 1.0 201 16.5 1,135 88 7.2 50 20 3 20 (14) 6 0.5 2 39.2 4 18 1.5 34.2

% chg (qoq) 1.9 (2.4) 5.1 82.5 3.2 (0.0) 26.3 (6.1) 1.9 5.8 127.5 (2.7) 419.1 311.0 489.0 102.2

9MFY13 3,698 2,529 68.4 215 5.8 46 1.2 598 16.2 3,388 310 8.4 152 61 12 110 (28) 82 2.2 27 32.8 55 83 2.2 34.2

9MFY12 3,374 2,528 74.9 178 5.3 37 1.1 500 14.8 3,243 131 3.9 140 53 22 (41) (3) (44) (1.3) (13) 30.0 (31) (27) (0.8) 34.2 (8.9) (8.0)

3QFY13

% chg (yoy) 9.6 0.0 21.0 25.4 19.6 4.5 137.1 8.1 13.4 (45.7) -

183.7 356.4

1.1 5.2

489.0 102.2

16.1 24.2

February 8, 2013

CEAT | 3QFY2013 Result Update

Conference call Key highlights

According to the company, the OEM demand remains weak currently, given the weak macro-economic environment. The demand in the replacement segment is also seen sluggish. Ceat has signed a joint venture (JV) agreement with A K Khan and Company, a Bangladesh based business house, to set up a bias tyre manufacturing facility in Bangladesh. Ceat will hold 70% in the JV Company. The balance 30% will be held by A K Khan and Company. The JV would entail an investment of US$67mn (`355cr) towards the new plant and is expected to commence operations by the end of 2014. The Management is targeting to increase its presence in the higher margin two-wheeler tyres where there is less competition. The company has managed to increase its market share in the two-wheeler tyre segment to ~18% from ~14% in 1QFY2013. Ceat is operating at ~75% utilization levels across all its plants. Around 20-25% of the raw-material requirement of Ceat is currently imported. The company reported an 8% yoy (5% qoq) decline in net sales to `102cr in its Sri Lanka operations with EBITDA margins at 17.1% (flat qoq). The top-line was impacted due to a 2% qoq decline in volumes. On a yoy basis, decline in net average realization impacted the performance. The net profit declined 9% yoy to `11cr. Ceat enjoys ~50% market share in the replacement segment in Sri Lanka. The current capacity stands at 60TPD and is operating at 100% utilization levels. The exports from Sri Lanka operations account for ~35% of its revenues. The realization on the exports front is generally lower. The Management stated that the consolidated debt has been reduced to `1,257cr from `1,350cr in 1QFY2013. The company expects the raw-material prices to remain soft going ahead and therefore expects margins to remain strong in the near term. However, there is pressure from the OEMs to reduce prices. The company is currently negotiating on a new pricing formula with the OEMs.

February 8, 2013

CEAT | 3QFY2013 Result Update

Investment arguments
Tyre industry Set for a structural shift: Currently, manufacturing radial tyres is far more capital intensive than cross-plys. The investment per tpd for radial tyres is 3.2x of cross-plys at `6.1cr/tpd. On the other hand, the selling price of radial tyres is around 20% higher than cross-ply tyres. Taking into account the difference in capital requirements and the consequent impact on asset turnover, for interest cost and depreciation to generate a similar RoCE and RoE, tyre companies would need to earn EBITDA margins of around 21% compared to around 9% being earned on cross-ply tyres. Thus, higher capital requirements will help protect margins from upward-bound input costs, as the business model evolves bearing in mind the final RoE rather than margins. With the sector set for a structural shift and apparent pricing flexibility, it will result in an improvement in RoCE and RoE of tyre manufacturers going forward. Volume growth to benefit from capacity expansion: Ceat is ramping up its radial capacity at the Halol plant to 150TPD, which is likely to be fully operational by 2QFY2014. With the completion of the proposed expansion, the product mix of truck : non-truck is likely to improve to 55:45, thereby fetching better margins. Increasing focus on exports: Ceat has been increasingly focusing on exports, especially the high-margin specialty tyres, in a bid to offset volatility in its domestic tyre business in the long run.

Outlook and valuation

We retain our positive view on Ceat and believe that the company will continue to report a strong performance led by gradual ramp-up at the Halol plant and stable raw-material prices. However a slowdown in demand remains a concern as the replacement demand has not picked up as anticipated. Consequently, we estimate Ceat to post an EPS of `40.8 in FY2014. At `103, the stock is trading at an attractive valuation of 2.5x FY2014E earnings. We retain our Buy rating on the stock with a price target of `163, valuing the stock at 4x FY2014E earnings. Key downside risks to our call: Any rise in input costs, increasing competitive intensity with major players diversifying globally, and lower-than-anticipated growth in replacement tyre demand pose downside risks to our estimates.

February 8, 2013

CEAT | 3QFY2013 Result Update

Exhibit 7: One-year forward P/BV band

(`) 300 250 200 150 100 50 0 Share Price (`) 0.2x 0.5x 0.8x 1.1x

Exhibit 8: One-year forward EV/EBITDA band

(` cr) 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 EV (` cr) 2.0x 4.0x 6.0x 8.0x

Feb-08

Sep-05

Jul-06

Jul-10

May-11

Dec-08

Jan-04

Nov-04

Mar-12

Apr-03

Apr-07

Oct-09

Jan-13

Sep-05

Feb-08

Jul-06

Jul-10

May-11

Dec-08

Jan-04

Nov-04

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 9: Auto Ancillary Recommendation summary

Company Apollo Tyres* CEAT JK Tyre* Reco. Accumulate Buy Buy CMP (`) 86 103 116 Tgt. price (`) 97 163 165 Upside (%) 12.1 58.0 42.3 P/E (x) FY13E 6.6 3.5 3.1 FY14E 6.0 2.5 2.8 EV/EBITDA (x) FY13E 4.4 3.3 5.2 FY14E 3.9 2.8 4.3 RoE (%) FY13E 21.0 14.5 18.8 FY14E 19.4 17.0 17.8 FY11-14E EPS CAGR (%) 33.2 279.6 -

Source: Company, Angel Research; Note: *Consolidated

Company background
Ceat, a part of the RPG Group, is amongst the leading tyre manufacturers in the country with an overall market share of ~12%. The companys manufacturing facilities are located in Bhandup, Nashik and Halol. The company has an overall production capacity of 615TPD (including outsourced). It exports to countries across Asia, Africa, Europe and America. Exports constitute 22-24% of Ceat's total volumes. The company has recently acquired the global rights of the Ceat brand from Italian tyre maker Pirelli - this will enable the company to expand its global presence. Ceat also operates in Sri Lanka through a JV and has a ~50% share in Sri Lanka's tyre market.

February 8, 2013

Mar-12

Apr-03

Apr-07

Oct-09

Jan-13

CEAT | 3QFY2013 Result Update

Profit and loss statement (Standalone)

Y/E March (` cr) Total operating income % chg Total expenditure Net raw material costs Other mfg costs Employee expenses Other EBITDA % chg (% of total op. income) Depreciation & amortization EBIT % chg (% of total op. income) Interest and other charges Other income Recurring PBT % chg Extraordinary items PBT (reported) Tax (% of PBT) PAT (reported) ADJ. PAT % chg (% of total op. income) Basic EPS (`) Adj. EPS (`) % chg FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E 2,366 1.7 2,343 1,799 211 159 175 23 1.0 26 (2) (0.1) 84 49 (37) (37) (21) 57.1 (16) (16) (0.7) (4.7) (4.6) 2,807 18.6 2,511 1,869 253 190 200 296 10.5 27 269 9.6 72 42 239 239 74 31.0 165 165 5.9 48.2 48.3 3,499 24.6 3,359 2,594 306 212 248 139 (52.9) 4.0 34 105 (60.9) 3.0 100 28 33 (86.1) (5) 39 11 28.5 22 28 (83.3) 0.8 6.5 8.0 (83.3) 4,472 27.8 4,220 3,336 372 236 275 252 81.2 5.6 70 182 73.0 4.1 192 20 10 (70.5) (2) 12 2 18.8 8 10 (64.8) 0.2 2.2 2.8 (64.8) 4,822 7.8 4,426 3,394 424 285 323 396 56.9 8.2 80 315 73.4 6.5 201 21 136 1,288.6 136 34 25.0 102 102 951.1 2.1 29.8 29.8 951.1 5,403 12.0 4,952 3,812 470 321 348 451 13.9 8.3 85 366 15.9 6.8 183 26 209 53.4 209 69 33.0 140 140 37.0 2.6 40.8 40.8 37.0

(88.1) 1,178.1

February 8, 2013

CEAT | 3QFY2013 Result Update

Balance sheet statement (Standalone)

Y/E March (` cr) SOURCES OF FUNDS Equity share capital Reserves & surplus Shareholders Funds Total loans Deferred tax liability Other long term liabilities Long term provisions Total Liabilities APPLICATION OF FUNDS Gross block Less: Acc. depreciation Net Block Capital work-in-progress Investments Long term loans and advances Other noncurrent assets Current assets Cash Loans & advances Other Current liabilities Net current assets Total Assets 1,234 459 775 20 43 819 202 79 538 507 312 1,150 1,256 487 769 234 59 1,032 140 109 782 790 241 1,303 1,882 520 1,361 107 87 22 1,222 48 126 1,048 1,212 10 1,586 2,112 588 1,524 13 74 8 1,369 33 143 1,192 1,229 139 1,759 2,146 668 1,478 64 81 8 1,609 109 193 1,307 1,309 301 1,932 2,243 753 1,489 67 83 8 1,741 60 216 1,464 1,422 318 1,966 1,150 1,303 34 454 488 645 16 34 594 629 654 20 34 615 649 904 24 1 8 1,586 34 622 656 1,071 22 1 8 1,759 34 720 754 1,146 22 1 8 1,932 34 854 888 1,046 22 1 8 1,966 FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E

February 8, 2013

CEAT | 3QFY2013 Result Update

Cash flow statement (Standalone)

Y/E March (` cr) Profit before tax Depreciation Change in working capital Others Other income Direct taxes paid Cash Flow from Operations (Inc.)/Dec. in fixed assets (Inc.)/Dec. in investments Other income Cash Flow from Investing Issue of equity Inc./(Dec.) in loans Dividend paid (Incl. Tax) Others Cash Flow from Financing Inc./(Dec.) in cash Opening Cash balances Closing Cash balances FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E (37) 26 47 123 (49) 21 131 (36) (33) 49 (19) 168 0 (119) 48 160 42 202 239 27 (260) 343 (42) (74) 233 (237) (16) 42 (210) 9 0 (93) (84) (61) 202 140 39 34 131 80 (28) (11) 244 (499) (28) 28 (498) 250 16 (104) 162 (92) 140 48 12 70 (144) 156 (20) (2) 72 (136) 12 20 (104) 167 8 (16) 159 (15) 48 33 136 80 (85) (21) (34) 76 (85) (7) 21 (71) 75 4 71 77 33 110 209 85 (67) (26) (69) 132 (100) (1) 26 (75) (100) 6 (106) (49) 110 61

February 8, 2013

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CEAT | 3QFY2013 Result Update

Key ratios
Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value Dupont Analysis EBIT margin Tax retention ratio Asset turnover (x) ROIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating ROE Returns (%) ROCE (Pre-tax) Angel ROIC (Pre-tax) ROE Turnover ratios (x) Asset Turnover (Gross Block) Inventory / Sales (days) Receivables (days) Payables (days) WC cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage (EBIT / Int.) 0.8 17.3 (0.0) 0.7 1.5 3.7 1.2 5.5 1.0 1.5 3.8 0.9 1.3 2.4 1.6 1.0 2.0 2.0 1.9 43 48 78 22 2.3 41 45 81 14 2.2 51 45 102 3 2.2 47 45 98 3 2.3 52 47 95 11 2.6 52 47 91 15 (0.2) (0.3) (3.2) 21.9 24.4 29.6 7.3 7.2 4.3 10.9 11.0 1.5 17.1 18.1 14.5 18.8 20.1 17.0 (0.1) 0.4 2.5 (0.1) 6.4 0.8 (5.5) 9.6 0.7 2.8 18.5 7.7 0.8 26.8 3.0 0.7 2.7 5.9 9.2 1.0 2.7 4.1 0.8 2.9 9.5 15.8 1.3 1.2 6.5 0.8 2.8 13.9 13.6 1.4 14.5 6.8 0.7 3.0 13.7 11.2 1.1 16.6 (4.7) (4.6) 2.8 0.0 142.6 48.2 48.3 55.0 4.0 183.6 6.5 8.0 18.0 2.0 189.6 2.2 2.8 23.4 1.0 191.7 29.8 29.8 53.3 1.0 220.3 40.8 40.8 65.7 1.5 259.4 37.2 0.7 0.0 0.3 32.6 0.7 2.2 1.9 0.6 3.9 0.3 2.7 0.6 15.9 5.7 0.5 1.9 0.3 8.1 0.7 46.9 4.4 0.5 1.0 0.3 5.2 0.7 3.5 1.9 0.5 1.0 0.3 3.3 0.7 2.5 1.6 0.4 1.5 0.2 2.8 0.6 FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E

February 8, 2013

11

CEAT | 3QFY2013 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

CEAT No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to -15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

February 8, 2013

12