Ceat slips after weak Q3 outcome

20 Jan 2022 , 10:06 AM

Revenue from operations grew by 8.6% to Rs 2,413.27 crore in Q3 FY22 from Rs 2,221 crore posted in the same period last year. The tyre maker reported a pre-tax loss of Rs 23.67 crore in Q3 FY22 as against a profit before tax of Rs 201.9 crore registered in Q3 FY21.

The companys EBITDA margin slipped to 5.93% in Q3 FY22 from 9.2% in Q2 FY22 and 15.28% in Q3 FY21. Meanwhile, the companys interest service coverage ratio stood at 2.93% in Q3 FY22 as compared to 4.43% in Q2 FY22 and 6.08% in Q3 FY21.

Commenting on the results and operational performance, Anant Goenka, MD of CEAT said, ?We are witnessing muted demand in the Replacement segment due to tepid consumer sentiment, higher fuel prices and softer uptick in Indias rural markets. The ongoing semi-conductor shortages continue to impact OEM Passenger segment sales. However, the silver lining is that we have gained market share in the Passenger segment and seen robust growth in the OHT and International Business. The 2-wheeler EV business is another exciting space where we continue to be strong. Our margins continue to be under pressure due to rising commodity prices, which have begun to taper down towards the end of Q3. We are taking necessary corrective actions to cut costs and are looking at appropriate price increases going forward.?

Kumar Subbiah, CFO of CEAT said, ?We continued to face high inflation in raw material prices in Q3 and hence we have taken necessary steps to exercise strong control over discretionary costs. The weakened market scenario and rising input costs continue to put pressure on our margins, leading to an increase in our debt levels during the quarter. We have brought down our finished goods inventory levels and have already taken the necessary steps to bring down the raw material inventory in Q4, which will help balance our cashflows and keep a check on our overall debt.?

CEAT, the flagship company of RPG Enterprises, is one of Indias leading tyre manufacturers and has a strong presence in global markets. CEAT produces over 15 million tyres a year and offers the widest range of tyres to all segments and manufactures radials for heavy-duty trucks and buses, light commercial vehicles, earthmovers, forklifts, tractors, trailers, cars, motorcycles and scooters as well as auto-rickshaws.

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