Tyremaker Ceat on Wednesday posted a consolidated net profit of Rs 9.25 crore for the first quarter ended June, below analyst estimates of Rs 11.6 crore, impacted by rising raw material costs. The company had posted a net profit of Rs 23.98 crore for the same quarter of the last financial year.
During the quarter under review, the firm’s consolidated revenue from operations rose to Rs 2,818.38 crore from Rs 1,906.39 crore posted during the first quarter of FY22. The company’s Ebitda margin stood at 6.1%, a contraction of 145 basis points (bps) from that posted during the sequential fourth quarter.
“We witnessed a strong topline growth during the quarter, aided by robust momentum in original equipment manufacturer (OEM) and replacement segments. We continued to ramp up our capacities as demand picked up across categories. However, the continued spike in commodity prices has impacted gross margins, which was partially offset by price adjustments over the last quarter,” Ceat managing director Anant Goenka said in a statement.
During the reporting quarter, the company’s cost of materials consumed rose to Rs 2,037.46 crore from Rs 1,288.12 crore recorded in the previous year.
During the quarter, the company’s net profit on a standalone basis fell to Rs 2.55 crore from Rs 19.95 crore recorded during the year-ago period. Its revenue from operations fell to Rs 2,803.08 crore from Rs 1,897.76 crore. The firm’s Ebitda margin stood at 5.9%, a contraction of 133 bps compared with a fourth of FY22.
“We continued to keep tight control on cashflows and costs during the quarter. Despite a capex of Rs 250 crore, we have maintained our net debt level close to the previous quarter. Raw material costs moved up during this period, impacting our margins adversely. However, there has been some correction in the commodity prices recently, and if the trend continues, it will bear a positive impact on the business,” said Kumar Subbiah, chief financial officer of Ceat.
Ahead of the earnings announcement, Ceat’s share prices closed up 0.07% at Rs 1,200 on the BSE.