Ceat targets Rs 2900cr in rev for FY10

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Ceat has announced its third quarter results. The company's Q3 net profit was at Rs 24 crore versus loss of Rs 21 crore, year-on-year, YoY. Its net sales were up 30% at Rs 740 crore, YoY.
 
In an interview with CNBC-TV18, PK Chowdhary, Managing Director of Ceat spoke about the results and his outlook for the company.

Below is a verbatim transcript of the interview. Also watch the video.

Q: What has happened on the revenue or the sales front?

A: Our net sales has risen from Rs 570 crore in Q3 last year to Rs 740 crore in this particular quarter, which is 30% more. Our net sales has grown by 30% from 570 to 740 and our profit before tax (PBT) has gone up from minus Rs 21.8 crore to Rs 33.1 crore. The PBT to net sales margin has come at 4.4%.

Q: So what does that leave your operating profit margins at?

A: The operating profit, if we look at PBT to net sales, that has come at 4.4%. In the previous year we had a negative figure because we lost money in Q3 of last year we were minus 3.8% and from minus 3.8% we are plus 4.4% for this particular quarter. In Q1 and Q2 of this year we had a pretty good going.

Our PBT to net sales margins stood at around 12%. So from Q2 levels we have come down in our margins mainly due to the natural rubber price increases which were very sharp and very quick.

Q: Are you confident of holding such margins then for the rest of this calendar year?

A: The margins have come down sharply from Q2 to Q3. We expect the margins in Q4 to remain more or less at the same level. I don't expect it to go up because natural rubber prices continue to surge. They have been surging ahead at the average of Q3. We have had a 5% price hike in all the segments in the first week of January but this 5% price hike is not going to lead to an improvement in margins. It will hold us to more or less the same level of margins.

Q: So assuming there maybe no more price increases in the near future in any rate, what do you think you might finish up the financial year with in terms of sales or revenues?

A: Our expectation for the net sales for the whole year is at Rs 2,900 crore as against 2,500 crore last year. So we are looking at a 16% growth in net sales. As far as the profit is concerned, for the first nine months we have already made a PBT of Rs 217 crore PAT of Rs 146 crore.

I expect the last quarter to be more or less same as Q3 in which case we should end up at about Rs 240 crore kind of PBT and a PAT of approximately Rs 170 crore.

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