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Expect growth to come in all three business verticals, says Ceat


The Ceat management appeared positive on growth and demand when they met analysts last week. The company looks to expand capacity across all segments. Kumar Subbiah, chief financial officer of Ceat shared his outlook.

We expect growth to come in all three business verticals that is original equipment manufacturers (OEMs), exports as well as from our replacement market,  said Kumar Subbiah, chief financial officer, Ceat
“Demand for truck and bus radial tyres has been very robust in the last nine months or so. So our current capacity utilisation is full,” he said.
“We are working towards capex plan of about Rs 4,000 crore covering even speciality categories over three-five years kind of a timeframe. We would need close to about Rs 1,000 crore for truck and bus radials and our incremental capex for two-wheelers is not much, we need about Rs 400-450 crore,” he added.
“Currently the balance sheet looks reasonably healthy. Our debt equity is about 0.3 at this point in time and we have enough balance sheet strength to fund it through internal accruals as well as through debt,” said Subbiah.
There is a 100% capacity utilisation at Halol plant and the plant is expected to be commissioned in Q3FY19, he said.
We expect 2-3% rise in raw material prices in this quarter, he said adding that crude prices will impact raw materials in the next 2-3 quarters.
We expect natural rubber prices to remain at the same prices, added Subbaiah.
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