CEAT Limited, a prominent company within the RPG Group, has announced its unaudited results for the first quarter ending June 30, 2024. The company reported consolidated revenues of Rs. 3,192.8 crore, reflecting a quarter-on-quarter growth of 6.7% and a year-on-year increase of 8.8%. However, the EBITDA margin saw a contraction of 124 basis points compared to the previous quarter, standing at 12.2%. Net profit for the quarter was reported at Rs. 154.2 crore.
Robust Performance Amidst Cost Challenges
Commenting on the results, Arnab Banerjee, Managing Director and CEO of CEAT Limited, expressed optimism about the company’s performance. “We are encouraged by the strong growth in the replacement and export segments across all categories during the quarter. Despite facing margin pressures due to significant increases in raw material costs and ocean freight, we are actively mitigating these challenges through strategic price adjustments,” Banerjee stated.
He highlighted the company’s strategic focus on premiumizing passenger car tires, which has begun to yield positive results. Looking ahead, CEAT anticipates continued momentum in volume throughout the second quarter and beyond. The company is also front-loading its capital expenditures this year to ensure it is well-prepared to meet rising demand.
Standalone Performance and Financial Health
On a standalone basis, CEAT reported revenues of Rs. 3,168.2 crore with an EBITDA margin of 12.0%, showing a contraction of 121 basis points compared to the previous quarter. The net profit for standalone operations stood at Rs. 149.2 crore.
Kumar Subbiah, CFO of CEAT Limited, remarked on the year-on-year growth of approximately 8.8% in the consolidated topline, primarily driven by volumes. He noted that the operational margin declined during the quarter, mainly due to increased commodity costs and higher marketing expenditures. However, the company maintained strong controls over operating and manpower costs, ensuring efficient resource utilization and sustained financial health.
Strategic Investments and Future Outlook
CEAT incurred a capital expenditure of Rs. 254 crore during the quarter, largely funded through internal accruals. This investment aligns with the company’s strategic plan to enhance its operational capabilities and meet future demand.
Looking forward, CEAT remains focused on sustaining its growth trajectory while navigating the challenges posed by cost pressures. The company’s proactive strategies in pricing, premiumization, and capital investment are expected to drive continued success in the upcoming quarters.
