RPG Group-owned tyre manufacturing company CEAT has revealed that it expects demand for two-wheelers within the country to select up within the Jan-Mar quarter of 2023 financial 12 months (Q4 FY23). Kumar Subbiah, Chief Financial Officer (CFO) of CEAT, in an interview with CNBC-TV18, said, “So far as quarter 4 is anxious, quarter on quarter we expect two-wheelers to grow.”
Subbiah also added that commodity costs could go down by 2-3 percent in Q4. He said, “Within the last two quarters, our EBITDA margin has improved from 6 percent to eight.7 percent. So about 270 basis points (bps) improvement. Commodity cost cooling off has played a task when it comes to improvement in margins. Now we have indicated that commodity cost could go down by about 2-3 percent in quarter 4.”
While talking about future expectations, he stated that “We usually are not very removed from 10 percent at this time limit, we’re at 8.7 percent so our internal goal is at all times to succeed in to double-digit number. There’s a very good probability of reaching that number in quarter 4.”
Subbiah also explained the rising cost of raw materials and its impact on the corporate’s business. He said, “Natural rubber prices have moved up by about $100 within the last two weeks within the international market. So due to this fact we may have to attend and watch. We is not going to like to come back to any conclusion based on what has happened within the last one-two week. Subsequently, beyond a 2-3 percent drop in quarter 4, we usually are not able to offer any view.”
He further stated that the CEAT’s exports are also constantly facing headwinds, especially in Europe. Subbiah said, “Exports proceed to face headwinds as we had earlier shared in Europe and likewise other parts of the world. In order that is putting pressure. The quarter 4 outlook is little higher than quarter three. But considering the world is more likely to undergo a recession and Europe’s recovery remains to be not very clear, exports could still be a bit of bit under pressure.”
(Edited by : Pradeep John)