Ceat posts profit despite costlier raw materials

Ceat has reported a net profit of Rs 24 crore for the third quarter of this fiscal, against a loss of Rs 21.64 crore in the same period last year.

The net profit in the preceding quarter was higher at Rs 61 crore.

The RPG group company's total income rose 29 per cent to Rs 745 crore (Rs 578.5 crore).

“Rising raw material cost has impacted profitability,” said Mr Paras K. Chowdhary, Managing Director.

The company has seen a 15 per cent increase in cost from the previous quarter. It spent Rs 465 crore on raw materials for the third quarter, up from Rs 322 crore in the same period last year.

“Although we hiked tyre prices by 2 to 3 per cent in October, it was not comparable with the cost push we suffered,” Mr Chowdhary said.

As a result of higher natural rubber prices, the tyre maker hiked tyre prices by 5 per cent in January. “We expect raw material prices to increase by 11-12 per cent this quarter. This will further impact profitability of tyre companies,” he said.

The Ceat stock was down 6 per cent to Rs 142.15 on Friday on the BSE.

Source: Indiacar.com: Source : Business Line (Online Edition) (1/22/2010)