Ceat reports net loss of Rs 20.18 cr as raw material prices hurt
Tyre maker Ceat posted a consolidated net loss of Rs 20.18 crore for the October-December quarter, which was below analyst estimates of Rs 56.4 crore.
The company had posted a net profit of Rs 132.34 crore for the same period a year ago, it said in a BSE filing.
The company’s net was impacted by a 40% increase in raw material prices in the last one year, and the firm could not pass the entire quantum to customers. Going forward, the company will aim for some more price hikes, Ceat managing director Anant Goenka told FE in an interaction.
During the quarter under review, the RPG Group company’s revenue from operations rose to Rs 2,413.27 crore from Rs 2,221.25 crore recorded during the same year-ago period, it said.
“We are witnessing muted demand in the replacement segment due to tepid consumer sentiment, higher fuel prices and softer uptick in India’s rural markets. The ongoing semiconductor shortages continue to impact original equipment manufacturer passenger segment sales,” Goenka said.
“However, the silver lining is that we have gained market share in the passenger segment and seen robust growth in the off-highway tyres and international business. The two-wheeler electric vehicle business is another exciting space where we continue to be strong,” he added.
On a standalone basis, Ceat posted a net loss of Rs 15 crore on revenues of Rs 2,406 crore during the reporting quarter. Its Ebitda margin stood at 5.5%, a contraction of 340 basis points versus the second quarter of the financial year.
The company’s margins continued to be under pressure due to rising commodity prices, which have begun to taper down towards the end of the third quarter.
“The weakened market scenario and rising input costs continue to put pressure on our margins, leading to an increase in our debt levels during the quarter. We have brought down our finished goods inventory levels and have already taken the necessary steps to bring down the raw material inventory in the fourth quarter, which will help balance our cash flows and keep a check on our overall debt,” Ceat CFO Kumar Subbiah said.
Ahead of the earnings announcement, Ceat’s share prices closed down 1.42% at Rs 1,133.45 on the BSE.