MUMBAI: Ceat Limited, the flagship company of the RPG Group posted 32.82% increase in its consolidated net profit for the March ending fourth quarter led by softening rubber prices and growing volumes on the two wheeler front.
The company posted a consolidated net profit of Rs 64.90 crore for the quarter of FY-13 as against Rs 48.86 crore it posted for the same period last year. EBITDA for the quarter stood improved 30 basis points to 10.7%. (1% = 100 basis points). The consolidated net sales of the company jumped 6% for the fourth quarter to 1333.42 crore.
For the full fiscal year FY-13, the consolidated net profit increase almost six fold to 120.19 crore and net sales for FY-13 jumped 8.56% to Rs 5,009 crore and EBIDTA margins saw a jump of 320 basis points
"The company's profitability margin has been improved significantly by 3% year on year basis over the last few months, due decrease in rubber prices in international market and the operation of the new radial tyre plant at Halol in Gujarat," said Anant Goenka, MD, CEAT Limited.
"The margins in the year ahead will continue to remain on the good side even though over all growth will be relatively slower and the raw materials cost will also stable in next 2 to 3 months," he further added.
Goenka says, despite the tough external environment, with stable raw material prices, Ceat expects to replicate this good performance in the forthcoming quarters too
In fact with the global rubber prices hovering around Rs 135 per kg as against Rs 160-165 per kg in India, Goenka says, Ceat will be importing rubber from outside in a larger quantity to take advantage of the current pricing situation.
In the fiscal year 2013, the company has managed to reduce the debt by Rs 273 crore to Rs 1,038 crore in FY-13. And the debt equity ratio has come down from 1.9:1 to 1.3:1.
"We hope to bring down the debt equity ratio below 1 in FY-14 with focus on tight working capital management and improving operational efficiency," said the Manish Dugar, CFO, Ceat Ltd.
Ceat Ltd will be investing Rs 60 crore to meet its capital expenditure requirement for FY-14, with Rs 10 crore going into its plant in Bangladesh, which is expected to go on stream in the next fiscal year.
The company plans to launch 100 new products in the FY-14 and aims to build on its market share in the two wheeler tyre space, where it gained over 5% market share in FY-13 to 19%.
Goenka says, while the demand in the replacement market remains muted, it has managed to increase its OE sales by adding Royal Enfield, Bajaj AutoBSE -0.75 % and Volvo Eicher in FY-13.
Of its overall revenues, Ceat Limited garners about 20-23% sales from supplying directly to the Original Equipment Manufacturers (OEM), 55% from the replacement market and the balance 25% from exports.
Goenka says he hopes to completely utilise the Halol plant capacity in FY-14. And it will continue to rely on outsourcing model to meet increased demand in FY-14.