Tyre maker Ceat, reported a remarkable 32-fold increase in net profit for the fiscal quarter ending in September. This surge was driven by reduced expenses due to a decline in raw material prices and increased revenues resulting from an improved product mix. The company achieved a net profit of Rs 207.72 crore in Q2FY24, in contrast to Rs 6.4 crore in the same quarter the previous year. Sequentially, the profit saw a 44% rise.
Ceat’s revenue from operations exhibited a 5.5% year-on-year growth, reaching Rs 3,053.32 crore. On a quarter-on-quarter basis, revenue increased by 4%. The EBITDA margin for the September quarter reached 15.1%, marking a 202 basis points expansion compared to Q1FY24.
The cost of raw materials consumed by the company decreased by 14% year-on-year. Ceat’s management attributed the improved profitability to several factors, including a more favorable product mix, price increases in the aftermarket segment, and the softening of raw material prices. They also noted that raw material prices are expected to firm up in the upcoming quarter.
In addition to this, Ceat is concentrating on specialty tires, such as those used in electric vehicles and specialized farm applications, with 44 such specialty tire launches planned for the US, EU, and India in the December quarter.
On Tuesday, Ceat’s shares closed at Rs.2,194.75, marking a substantial 4.4% increase on the NSE.