Industry

Tyre maker Ceat all set to roll into best-ever sales in H2


Tyres maker expects its sales to scale a new peak in the latter half of this fiscal year as its production capacity improves along with better demand from automakers, the tyre replacement market and exports.

The company’s new car tyre plant at Chennai has become operational and was being “well-utilised”, giving it further headroom to grow, Anant

, MD of Ceat told ET. The company is also laying the foundation for an upcoming truck tyre plant.

“We are feeling quite confident. We have enough capacity that we set up over the last year and a half and we have enough headroom for growth. And despite the challenge on container availability, export market is a great opportunity,” Goenka said.

Supplies to automakers were improving despite a shortage of semiconductors impacting car production, the company said. That was primarily due to a recovery in the manufacturing of commercial vehicles (CV).

Meanwhile, the replacement tyre market too has bounced back across segments as the economy slowly opens. Exports too were growing as the global economy recovers, Goenka said.

The company will be investing its usual capex of Rs 700-800 crore this year towards capacity expansion which includes the new car tyre plant, some de-bottlenecking at its CV tyre plant and laying the foundation for a new CV tyre plant at Chennai.

The company has also been readying a portfolio of tyres for electric vehicles and is presently a leader in tyres for electric two-wheelers. It already supplies to the electric two-wheeler industry where it has cornered a 90% market share, Goenka claimed.

While Ceat’s margins were under pressure due to cost inflation in the last quarter, the company plans to pass on the higher costs to consumers gradually over the coming quarters. During the September quarter the company posted an EBITDA margin of 9% which Goenka expects will improve to the company’s long-term average of 11% by the December or March quarter, before improving it further.



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