A child bathes beside Apollo truck tyres lined up at a retail outlet in New Delhi, India. (Photographer:Amit Bhargava/Bloomberg News)

Ceat Expects To Face Capacity Constraints For The Next Two Quarters

Ceat Ltd. said there will be supply constraints in the next couple of quarters till the company completes its capacity expansion.

“We will face constraints in terms of availability in the second quarter as our new truck and bus radial capacity will be operational only by the end of the third quarter,” Subbiah Kumar, chief financial officer at Ceat Ltd., told BloombergQuint in an interaction. “We should have some headroom due to the capacity expansion from the fourth quarter.”

The company is currently running at full capacity for its truck and bus radials. The capacity utilisation for passenger cars and two-wheelers is also high.

CEAT is planning a capital expenditure of Rs 1,500-1,700 crore in the ongoing financial year and Rs 1,500 crore for the next year. It has also drawn up a capex plan of Rs 4,000 crore for the next three to five years.

“The amount of capex for the next year depends on capacity utilisation and expected demand,” Kumar said.

Key Highlights From First Quarter Earnings

Consolidated Figures, Year-On-Year

  • Net profit stood at Rs 72 crore compared with Rs 1.6 crore.
  • Revenue was up 17 percent at Rs 1,706 crore against Rs 1,459.7 crore.
  • Earnings before interest, tax, depreciation and amortisation were up four times at Rs 175.8 crore compared with Rs 54.5 crore.
  • Ebitda margin stood at 10.3 percent against 3.7 percent.

Also read: Falling Rubber Prices Won’t Help Tyre Makers Much, CEAT Says