The company plans to raise prices on all of its products, for the third time in 2021, starting in July.

Tire maker Ceat Ltd reported a consolidated profit of Rs 230 million for the April-June quarter, but could not fully cover costs as high input prices depressed margins. Consumers.

In the same period last year, when its operations were blocked, the company lost Rs 350 million.

Consolidated revenues for the quarter were 70% higher at Rs 19.06.6 crore year-on-year, but at a lower level. Earnings before income amortization depreciation amortization. (EBITDA) grew 62% YoY to Rs 1.65% crore. However, the EBITDA margin declined by 45 bps to 8.7%.

Ceat Managing Director Anant Goenka The company expects margins to remain under pressure for the July-September quarter. It will gradually recover in the subsequent quarters. However, he expects sales to grow significantly in the second half of this fiscal year.

“Last quarter was a tough quarter for us. Revenues were up 70% year-on-year due to a low base, but it was quite challenging compared to previous quarters,” he told The Economic Times over the phone.

The company plans to start raising prices of all its products every year starting from 2019. July was the third rate hike in 2021. Prime Minister Goenka has said that he may consider a rate hike from August 8 month to another rate hike in September.

He added: “Raw material prices have increased by 10-12% over the last quarter. In order to restore normal profit levels, we need to raise prices by around 3-5% in the second quarter (July to September).” We do not expect further increase in raw material prices.

Crude oil and natural gas rubber are the two main raw materials for the tire industry.

However, Goenka is optimistic about demand recovery and margin normalization in the second half of the current fiscal year, helping the company to achieve double-digit growth in 2021 helping the company’s fiscal year.

The company has sufficient production capacity to meet the growing demand. The passenger car tire plant has a capacity utilization of 50-60% and more capacity is being built. Similarly, the truck lunch tire plant has a utilization rate of 60-70% and the company plans to expand it further. Goenka said that the two-wheeler tire plant is fully utilized at present, but only a small investment is required to add additional capacity of 15%.

On Wednesday, shares of Ceat Ltd closed 1.88% lower at Rs 1,399.2 on the Bombay Stock Exchange.