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Leading Indian tyre maker, CEAT Ltd, suffered a steep fall in the net profit owing to market factors, high cost of raw materials and the woes of transition to the dealership network. For the quarter ended on June 30th, there was a decline of 98.6% in its consolidated net profit due to the destocking by trade partners ahead of GST rollout and higher expenses.
CEAT’s total income during the period also decreased to ₹ 1,638.95 crore as compared to ₹ 1,651.83 crore in the corresponding quarter of last fiscal year. The medium and heavy vehicles in the commercial vehicle segments have particularly felt the impact.
Anant Goenka, Managing Director, with regard to the expansion plan has said that CEAT have ₹ 2,800 crore to put in place over the next five years in multiple locations. The company will also spend about ₹ 400 to 500 crore in the two-wheeler tyre unit in Nagpur and ₹ 1,000 crore at their Vadodara unit. However, he said that the overall outlook for the tyre industry looks good in the future.
