Tyre major Ceat on Wednesday posted a consolidated net profit of Rs 23 crore for the first quarter ended June 30, 2021. The company had reported a net loss of Rs 35 crore for the year-ago period amid massive COVID-led disruptions in the market.
Revenue from operations rose to Rs 1,906 crore in the first quarter as compared with Rs 1,120 crore in the same period of the previous fiscal year, Ceat said in a statement. It has been a challenging quarter with the second wave of COVID-19 restricting demand and rising input costs affecting margins. However, with progressive drop in COVID cases in the last four weeks and a steady increase of vaccination in the latter part of the quarter, we are witnessing a gradual pick-up in demand from early June in the replacement market and OEMs," Ceat Managing Director Anant Goenka said.
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The spike in commodity prices has impacted gross margins, which was partially offset by price increases over the last quarter, he added. The company continues to focus on the wellbeing of its employees, manage costs and stay prepared as demand bounces back, Goenka noted.
"Besides the uncertainties of a third wave of COVID infection in the country, we expect to see improving consumer confidence and growth going forward. We will continue to calibrate the market dynamics and align our business plans to the evolving scenario," he added. On a standalone basis, the company's revenue stood at Rs 1,898 crore and net profit at Rs 20 crore in the first quarter.
"Our overall margins have been impacted compared to the previous quarter owing to a steep rise in raw material prices and lower revenues during the quarter due to the second wave of COVID-19. "While raw material prices have currently remained range-bound, we would still need to take some more price increases to offset the impact," Ceat CFO Kumar Subbiah noted.
An RPG group flagship, Ceat manufactures tyres for two-wheelers, passenger vehicles and all kinds of commercial vehicles and has presence across 100 countries.
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