CEAT reported a 61 percent year-on-year (YoY) decline in its net profit at Rs 9 crore for the June quarter as high raw material prices impacted business. The company had posted a net profit of Rs 23 crore in the corresponding period last year.

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Revenue from operations rose to Rs 2,818 crore in Q1 of FY23 as against Rs 1,906 in Q1FY22.

"We witnessed a strong top-line growth during the quarter, aided by robust momentum in OEM and replacement segments. We continued to ramp up our capacities as demand picked up across categories. However, the continued spike in commodity prices has impacted gross margins, which was partially offset by price adjustments over the last quarter," CEAT Ltd MD Anant Goenka said in a regulatory filing.

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Elaborating further, CEAT CFO Kumar Subbiah noted that the company continued to keep tight control on cash flows and costs during the quarter.

"Despite a capex of Rs 250 crore, we have maintained our net debt level close to the previous quarter. Raw material costs moved up during this period, impacting our margins adversely," he added.

However, of late there has been a decline in commodity prices. If the trend continues, it will have a favourable effect on the company, Subbiah predicted.

Despite the decline in profit, the Mumbai-headquartered tyre company’s stock saw a 4 percent uptick from the previous close. The stock closed 4.21 percent higher at Rs 1,250 on the BSE.

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(With inputs from PTI)

(Edited by : Shoma Bhattacharjee)