Tyre maker Ceat today posted 30.41 per cent increase in consolidated net profit at Rs 107.4 crore for the second quarter ended September 30, primarily due to softening of raw material costs.
The company had posted a net profit of Rs 82.35 crore during the same period of previous fiscal.
However, net sales of the company declined to Rs 1,399.99 crore for July-September quarter as compared to Rs 1,425.76 crore in the same period of previous fiscal.
"Robust sales and lowering of raw material costs led to the enhanced profitability during the quarter," Ceat Ltd Managing Director Anant Goenka told PTI.
It has been a momentous quarter for the company which saw Phase-II of the Halol plant commence operations, thereby augmenting production capacity in the passenger car radials (PCR) and utility vehicle radial (UVR) segments, he added.
The dips in crude and rubber prices were welcome, though Chinese products flooding the market impacted the industry in the last quarter and the company's top line to a certain extent, Goenka said.
"However, margins improved largely due to lower raw material cost coupled with improving product mix," Goenka said.
During the second quarter, the company operationalised second phase of its Halol plant. This initiative has currently ensured an increase of close to one lakh tyres per month in Ceat's production capacity in PCR & UVR segment.
Besides, the complete ramp-up of capacity at Halol Phase-II would happen over a period of next 18 months to achieve a terminal capacity of little over 4.5 lakh tyres per month, which would take up the total capacity a little over 7.5 lakh tyres per month, Goenka said.
"The plant will help Ceat cater to the ever increasing demand for PCR & UVR tyres from the auto sector," he added.
Shares of Ceat today closed at Rs 1,177.75 apiece on the BSE, down 0.60 per cent from the previous close.
