Ceat Q4 net up 32 per cent at Rs 64.90 crore

Tyre maker Ceat on Wednesday reported a 32.83 per cent increase in its consolidated net profit for the quarter ended March at Rs 64.90 crore on the back of lower input cost.

The company had posted a net profit of Rs 48.86 crore during the corresponding period last year.

"There was a reduction in raw martial prices, including that of rubber which accounts for 40 per cent of our raw material. This (lower prices) was one of the key movers towards higher profitability," said Anant Goenka, managing director of Ceat, in Mumbai after announcing the financial results.

The consolidated net income during the quarter was up by 5.69 per cent to Rs 1,345.70 crore from Rs 1,273.25 crore in the year-ago period, the company said.

It added four new Original Equipment Manufacturers during the fiscal year namely Bajaj, Eicher, Volvo and Enfield and plans to roll out 100 odd new products in FY2013-14.

The company is continuously focusing on new products, Mr Goenka said, adding, "Last fiscal, we rolled out some 70 odd new products and looking at lunching 100 odd new products this year."

"Focused advertising campaigns have been a key catalyst to growth in market share and going forward, we will continue our investments in building a strong brand," he said.

For the entire financial year, the RPG Enterprises firm saw over six-fold rise in its consolidated net profit at Rs 120.19 crore compared to Rs 18.19 crore last fiscal year, while net income rose by 8.59 per cent to Rs 5,052.21 crore in FY13 from Rs 4,652.71 crore in FY12.

"This financial year has been a positive story for us. We have witnessed an EBITDA expansion of 320 BPS (3.2 per cent) for the full year on account of higher realisations due to change in product mix and soft raw material prices," Mr Goenka said.

He claimed that the company has consolidated its position in the two-wheelers segment by increasing its market share.

"With improved operational efficiency and focus on tight working capital management, we have been able to reduce our debt by Rs 273 crore to Rs 1,038 crore from Rs 1,311 crore in FY'12," said Manish Dugar, the company's CFO.

On the company's upcoming joint venture in Bangladesh, Mr Goenka said the JV company has already acquired 27 acres of land and the project should start in the next few months.

"Project should start in a few months' time. It will take about 18 months after that to commence operations. In between, we will be looking at doing sales and marketing activities through exports from India," he said.

Ceat has formed a joint venture company with the Bangladesh-based AK Khan & Company to set up a manufacturing facility in Bangladesh at an investment of Rs 275 crore. The 110-tonnes per day facility will roll out tyres for trucks, LCVs and 2/3 wheelers for the Bangladeshi market.

On the company's Sri Lanka operations, Mr Goenka said it continues to enjoy dominant position in that market with a strong market share of about 50 per cent as well as good profitability.