- Ceat Q1 profit beats estimates, tyremaker sees demand rising.
Indian tyremaker CEAT beat first-quarter profit estimates on Thursday, as price hikes coupled with healthy demand in the replacement market helped outweigh higher rubber costs.
Ceat’s profit increased 6.6 per cent to 1.54 billion rupees for the April-June quarter, beating analysts’ expectation of 1.52 billion rupees, according to LSEG data.
Revenue rose 8.8 per cent to 31.93 billion rupees, marking the biggest rise in nearly three years, per LSEG.
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KEY CONTEXT
Ceat is the first of its peers to report results for the April-June period in which car makers’ sales to dealers grew at their slowest pace in at least two years. Still, while the likes of Maruti Suzuki sold fewer cars to dealers, two-wheeler makers, including Hero MotoCorp, clocked a nearly 21 per cent sales growth.
Moreover, healthy demand in the tyre replacement market ahead of the monsoon season was expected to soften the blow of higher rubber prices for tyremakers, analysts said.
Ceat plans to front-load capital expenditure this year “to ensure we are well-prepared to meet rising demand,” CEO Arnab Banerjee said in a press release.
First Published Date: 19 Jul 2024, 08:29 AM IST