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Tyre manufacturer Ceat reported 20% fall in net profit at Rs 46.8 crore for the quarter ended June 30 as against 58.43 crore reported in the same quarter last year.
Drop in exports growth, increased advertising and employee costs and adverse market mix resulted in drop in operating margins during the reporting quarter.
Anant Goenka, managing director, Ceat said, "In the quarter we saw growth in supplies to the low-on-profit OEM segment. There were some increase in costs in areas like advertising and employee. Exports grew at just 5% while OEM sales grew 20%".
Net sales of the company grew 10% to Rs 1,400 crore during the quarter as against Rs 1,269 crore reported in the corresponding quarter last year. EBITDA margins during the quarter declined to 9% from 11.5%.
Going forward the company believes that there will be an overall improvement in margins as the profitable division of exports is expected to surge. Ceat, which is present in 100 countries, has identified new markets in South east Asia and middle east.
