Ceat Q2 net profit falls 75% to US$3.4M

Mumbai, India - Ceat Ltd, the Indian tyre maker, has seen second-quarter profits plummet 75 percent over the same period last year, primarily due to rising raw material costs, according to a Hindu Business Line report.

The firm's net profit was Rs 15.27 crore ($3.4 million) in the second quarter of FY-11, down from Rs 61.47 crore in the year-ago period.

“Raw materials cost is a major concern and the main reason for our lower net profit in Q2 FY'11. They are up 40 per cent as compared to the same period last year,” Ceat Deputy Managing Director, Anand Goenka, told PTI here on Wednesday.

Rubber, an important raw material, today costs Rs 187 per kilogram as compared to Rs 90-100 per kilogram in the same period last year. “Rubber price has risen by nearly 100 per cent,” Mr Goenka said.

He said that last year was an “abnormal one for the tyre industry” as raw materials prices had declined steeply due to the global economic downturn while the tyre market remained strong.

Read the full story at: http://www.thehindubusinessline.com/blnus/26201505.htm