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Tyre maker Ceat today posted over 20-fold fold rise in consolidated net profit at Rs 76.55 crore for the second quarter ended September 30, 2013-14, due to softening of the raw material costs and enhanced demand from the passenger segments.
The company, which had posted a net profit of Rs 3.81 crore for the same period of previous fiscal, is also planning to invest Rs 650 crore to expand its Halol-based manufacturing facility.
"During the period under review, we benefited from softening of raw material costs, which helped us in achieving better net realisation. Also, there has been a strong volume growth in passenger segments," Ceat Ltd Managing Director Anant Goenka told PTI.
Going forward, the company expects both growth and margins to be on the similar levels, he added.
"Our Sri Lankan operations too continue to show robust and profitable growth," Goenka said.
During the quarter, Ceat's net sales rose to Rs 1,318.81 crore for the second quarter, as against Rs 1,213.43 crore in the same period of previous financial year.
As passenger car penetration in India continues to increase, the company plans to expand production at its Halol plant.
The company is planning to invest Rs 650 crore to enhance the existing capacity of the radial tyre unit at Halol by 120 tonne per day (TPD).
"Ceat is seeing traction in utility vehicles (UV) radials and passenger cars. In order to cater to the growing demand of tyres in the domestic replacement market as well as to cater to new OEMs, we are expanding our production in passenger car and UV radials by 120 tonnes per day," Goenka said.
The plant currently produces 150 tonnes per day of radial tyres from its Halol facility.
"We will start investing in the expansion of the plant from early next year and it will take around 18 months to complete the work," Goenka said.
Ceat caters to tyres to various segments including heavy- duty trucks, buses, light commercial vehicles, earthmovers, tractors, cars, motorcycles and scooters.
Ceat stock closed at Rs 170.80 on the BSE, up 5.73% from the previous close.
