Q2 Result: CEAT Registers Slump Of 77 Percent In Its Net Profit
Published On 26-Oct-2021 17:11:10
The tyre brand blamed the rising input costs for the sharp decline in its gross income.
The Indian tyre maker CEAT Ltd, which was making steady growth, registered a sharp drop of 77 per cent in its net profit compared to the same period last financial year. While the net profit was INR 182.18 crore in the last FY, it shrunk to Rs 42.28 crore in the previous quarter which ended in September. The increasing expenses including the sudden surge in raw material cost are the underlying factors for this dip, it stated in the official statement.
CEAT Tyres also announced that its board has approved raising of up to Rs 500 crore at a meeting held on Monday. It will be done through the issuance of debt securities on a private placement basis.
In the regulatory filing, the tyre brand stated that the consolidated revenue of operations for the previous quarter stood at Rs 2451.76 crore up against the Rs 1978.47 crore in the corresponding quarter last year.
Speaking on the performance, CEAT Ltd MD Anant Goenka said that the demand continues to rise except for the farm and commercial categories where there is a slight lag. Alternatively, the tyre maker has registered strong growth in the passenger vehicles segment of the replacement market. “Meanwhile, the rising input cost is partially offset by raising the prices of its tyres”, he added.
In terms of expenses, Rs 1814.89 crore were spent last year during the same quarter, however, this time the amount went higher at Rs 2401.64 crore. Meanwhile, the raw material cost was the major catalyst to this dip in profit; it rose to Rs 1616.59 crore in this quarter from Rs 1051.57 crore during the same period last year.
In another key decision, the CEAT board in a meeting has approved the fundraising of Rs 500 crore through the release of NCDs (non-convertible debentures). These debt securities can be secured/unsecured, listed/unlisted and other similar types on a private placement basis. It can be raised in a single or more than one instalments.
In the same meeting, the board approved the appointment of Parak K Chowdhary as an additional non-independent director.
Looking for new CEAT Tyres? Find dealers near you