BENGALURU (Reuters) – Indian tyre maker CEAT on Monday reported a sharp rise in second-quarter profit which beat estimates, as strong sales and lower expenses boosted margins.
CEAT reported a consolidated net profit of 2.08 billion rupees ($24.99 million) for the quarter ended Sept. 30, compared with 78.3 million rupees a year earlier, when the company was hurt by higher raw material costs and a one-time expense related to employee payouts.
Analysts, on average, expected a profit of 1.52 billion rupees, according to LSEG data. Total quarterly expenses were down 2.5%, led by a 13.6% drop in input costs.
Mumbai-based CEAT is the first to report results among major tyre makers, which are expected to see some benefit from cooling raw material costs .
Ceat’s revenue for the three months to Sept. 30 rose 5.5% to 30.53 billion rupees.
Replacement demand – which for CEAT formed 53% annual sales – and steady sales of passenger and commercial vehicles are expected to help overall industry volumes grow 6% to 8% for the financial year 2024, Crisil Ratings had said in a note last month.
“Demand continues to be stable… Our focus on product mix and judicious pricing helped improve margins during the quarter,” said CEAT Chief Executive Officer, Arnab Banerjee.
Shares of the company closed 1.6% lower ahead of results.
($1 = 83.2360 Indian rupees)
(Reporting by Nandan Mandayam in Bengaluru)