Though rubber prices declined during Q1FY15, resulting in raw material cost of Ceat coming down around 1.5% (YoY) and down 10% (QoQ), total operating costs rose 13% (YoY) and 2.5% sequentially. This coupled with the 5% jump in interest outgo and tax outgo at over Rs.28 crore, the company ended the current Q1 with a consolidated net profit at Rs.51 crore, down 20% (YoY) and down 16% (QoQ). This was despite the net sales for the quarter coming in higher at Rs.1453 crore, up 10% (YoY). The company has said that higher employee outgo due to inflation and increased ad spends resulted in margins coming down; EBITDA for the quarter stood at 9.1%.

Volume growth was good, rising 11% but the good part is that it has been decreasing its debt consistently. Its consolidated debt forFY14 stood at Rs.1020 crore. Hopefully, in the coming months, with prospects for automobile sector expected to improve, Ceat could see much better growth in the second half.  In terms of overall investment for future growth, company has made an investment in Sri Lanka of 60 crore Sri Lankan rupees to expand its passenger car radial and UV radial category there. It also announced phase-II expansion of Halol and expects the plan to be ready in the next 12 months. The phase-I is 100% complete and fully ramped up.  The Bangladesh project is also on track and the company expects to start production in about a year from now. The company is also exploring the option of specialty tyres for future growth.