New Delhi: Ceat, India’s fourth premier tyremaker, has slashed its capital expenditure (capex) by 33 percent or Rs 250 crore for FY21 in response to the muted demand prompted by coronavirus pandemic, a leading firm govt mentioned.
The tyremaker’s new capital investment decision finances for the yr is now about Rs 500, a reduce from Rs 750 crore planned formerly .
Addressing company’s fiscal fourth-quarter 2020 earnings get in touch with, Anant Goenka, managing director, Ceat, mentioned that the reduction in capital expenditure, on the other hand, will not have any sizeable impression on the business enterprise operations of the firm.
“We have largely lower our capex by Rs 250 crore this yr and it will not have any impression on our overall performance for this yr because demand by itself is rather muted. If we are anticipating some kind of unfavorable expansion then in any case we are acquiring sufficient capacity for the following 15-eighteen months,” Goenka included.
Supplying an update on the company’s business enterprise operation in post pandemic time period, Kumar Subbaih, CFO, mentioned, “Our aim is on cost rationalisation and we are deferring capex in buy to protect cash. Now, our leading priority is to ensure timely clearance payments to MSMEs and many distributors.”
Past yr, the Mumbai-centered firm, with a current market share of about 11 percent, experienced introduced a whole capex of Rs four,000 crore for the following three decades to raise capacity across segments. “Out of this we have now spent Rs 2,100 for Ceat’s standalone business enterprise and. We have established apart Rs 500 crore to commit further than FY’22,” the CFO mentioned.
For the duration of the January-March quarter of FY’20, the firm described a 19.58 for each cent drop in consolidated net financial gain at Rs fifty one.72 crore over Rs 64.32 crore in the exact quarter a yr back.
Consolidated earnings from operations declined to Rs 1,573.41 crore throughout the quarter below critique as compared with Rs 1,760.47 crore in the corresponding time period of 2018-19.
For the monetary yr 2019-2020, the company’s net financial gain stood at Rs 230.06 crore as towards Rs 251.08 crore in the preceding yr.
Profits from operations declined to Rs 6,778.eighty three crore in FY20 as compared with Rs 6,984.fifty one crore in 2018-19.
Whilst the fee of Halol facility in February 2019 led to a expansion of 20 percent in truck and bus radial tyre volumes, Ceat’s passenger car tyre quantity grew by 6 percent throughout the just-finished fiscal.