Tyremaker CEAT Ltd reported a 41.8 per cent dip in consolidated net profit at ₹121 crore in the quarter that ended on September 30, as against ₹208 crore reported in the same quarter last year.

Sequentially, profit decreased 21.4 per cent in the September quarter, against ₹154 crore registered in the June quarter.

The Mumbai-headquartered company’s revenue from operations grew 8.22 per cent on year to ₹3,304 crore (₹3,053 crore) in the quarter under review. Sequentially, revenue increased by 3.50 per cent in the quarter, as against ₹3,192 crore posted in the June quarter.

The company announced a 300 per cent dividend in September.

“We are pleased to see that we have successfully carried the momentum from Q1 through Q2. This quarter marks our highest revenue ever, driven largely by robust performances in our Replacement and International sectors. While there’s a significant increase in commodity prices, our margins were impacted during the quarter. We took selective price increases during the quarter that offset part of the cost impact. The revenue outlook remains positive as we enter Q3,” said Arnab Banerjee, MD & CEO, of CEAT Ltd.

Further, the company is also setting up a wholly-owned subsidiary in Indonesia, ‘CEAT Tyres Indonesia PT’, in which it will initially invest ₹5 crore.

“This quarter also saw our overall debt level rise by ₹280 crore, driven in part by increased raw material inventory, necessitated due to an increase in the transit period on imports and the distribution of dividend to the tune of ₹120 crore in September. We are not happy with the drop in operating margins largely due to an increase in raw material prices. Starting from October we have taken nearly a 3 per cent price increase in passenger car tyres and close to a 2 per cent increase in bus radial tyres. However, going ahead, we do not see an increase in raw material prices,” said Kumar Subbiah, CFO of CEAT Ltd to businessline.

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