CEAT, whose clients include Tata Motors and Maruti Suzuki India, is the first listed Indian tyre maker to report results for the December quarter. Indian tyre maker CEAT reported a bigger-than-expected fall in third-quarter profit on Wednesday, as higher rubber costs outweighed the benefits of strong demand for replacement tyres.
The company said consolidated net profit fell 46.5% to INR 971.1 million (USD 11.25 million) for the quarter ended December 31 from INR 1.81 billion a year ago.
Analysts, on average, expected INR 1.33 billion, as per data compiled by LSEG. Revenue from operations rose 11.4% to INR33 billion, while total expenses grew about 16%.
CEAT, whose clients include Tata Motors and Maruti Suzuki India, is the first listed Indian tyre maker to report results for the December quarter. Analysts have noted that demand for replacement tyres persisted in the reporting quarter. This, along with price hikes, improved the company's revenue.
However, rising prices of rubber cut into CEAT's bottomline, as raw materials costs jumped about 25%. Lower tyre demand from original equipment manufactures also weighed. Company said it passed on part of the rise in raw material costs in select categories during the quarter to customers.
