Tyre maker and RPG Group company CEAT Ltd on Wednesday (January 15) reported a 46.5% year-on-year (YoY) decline in net profit at ₹97.1 crore for the third quarter that ended December 31, 2024.
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In the corresponding quarter of the previous fiscal, CEAT posted a net profit of ₹181.5 crore, the company said in a regulatory filing.
CEAT’s revenue from operations increased 11.4% to ₹3,299.9 crore against ₹2,963.1 crore in the corresponding period of the preceding fiscal.
At the operating level, EBITDA dipped 18.3% YoY to ₹340.9 crore in the third quarter of this fiscal over ₹417.5 in Q3 FY24.
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The EBITDA margin stood at 10.3% in the reporting quarter as compared to 14.1% in the corresponding period in the previous fiscal. EBITDA is earnings before interest, tax, depreciation, and amortisation.
Arnab Banerjee, MD and CEO of CEAT said, “We witnessed a strong year-on-year double-digit growth, driven by the replacement segment. While the rising raw material costs have impacted our margins, we progressively passed on part of the increase through price increases in select categories during the quarter. The demand continues to remain stable, and our order book pipeline is robust across all segments. Raw material prices look flattish in Q4 and we expect growth momentum to continue.”
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Kumar Subbiah, CFO of CEAT said, “The gross margins were impacted during the quarter due to the increase in raw material cost. We managed part of it through price increases and cost controls. Meanwhile, our capex during the quarter was ₹283 crore, which was fully funded through internal controls and hence, our debt level has remained at a similar level.”
CEAT has proposed a capital expenditure of ₹400 crore to enhance the production capacity at its plant located in Butibori, Nagpur, Maharashtra. The existing plant currently produces approximately 270 lakh tyres annually, with a capacity utilisation of 90%.
The expansion aims to increase capacity by 30%, with the additional capacity expected to come on line by the end of FY2027-28. The investment will be financed through a mix of internal accruals and debt. This expansion aligns with the company’s strategy to meet the anticipated increase in demand in the Indian two-wheeler and three-wheeler tyre market.
The results came after the close of the market hours. Shares of CEATLtd ended at ₹3,040, down by ₹2, or 0.066%, on the BSE.
(Edited by : Shoma Bhattacharjee)
