Ceat aims to tap opportunities as world looks for alternative to China
2 min read . Updated: 05 Feb 2023, 12:42 PM IST
PremiumCeat Ltd gets around 20% of its total revenue from exports. It plans to enter the US market later current year, following its entry into the European market for truck and bus radial tyres last year.
Despite the slowdown in many economies, Ceat Ltd is planning to cash in on the opportunity based on its ‘value brand’ positioning as the world is looking for an alternative to China for sourcing tyres, according to company Executive Director, Finance & CFO, Kumar Subbiah.
The company gets around 20% of its total revenue from exports. It plans to enter the US market later current year, following its entry into the European market for truck and bus radial tyres last year.
Speaking to PTI, Subbiah said that the company's exports have been flattish in the current fiscal year as it took some kind of beating, largely on account of current conditions in Europe and some other countries finding it difficult to get currency to import tyres.
“Exports, we expect it to come back to a growth path in the coming year, subject to global macroeconomic conditions permitting that kind of growth. We set ourselves ready to take advantage of any requirements. The world is looking for a good manufacturing source for tyres as an alternative to China and Indian tyre industry, and in particular, Ceat is in a good position to take advantage of that going into the next year," he said.
He was further makes if the slowdown in Europe and other global markets could hamper export growth. Our belief is that during a recessionary period, generally companies or buyers of tyres, or buyers of any products would look for a value brand," Subbiah replied.
Being a value brand in the international market, Ceat's director stated that it could help the company in terms of taking advantage of that kind of behaviour during the recessionary period, PTI reported.
"During the last year, we entered the European market for truck and bus radial tyres. We also have plans to enter the US market in the later part of the current year. So these things should help," he added.
However, while there is clarity in the local market about the demand pattern, in the international market it is not the case due to global events like the Russia-Ukraine war and its impact, especially on energy prices in Europe, he said.
When asked if the company is aiming for exports to contribute more than 20% of overall revenue, he said Ceat does not have any specific target but exports will play a role in its overall growth.
"We have moved (up) from 12-13 per cent of revenue share to 20 per cent. So, from here onwards, we may not be able to see that kind of jump. However, we are investing in capacities that are meant for exports, so therefore, we expect the share to go up without any target in mind," he told PTI.
As of December 31, 2022, Ceat Ltd had clocked a consolidated revenue from operations of ₹8,440.06 crore and in the fiscal ended March 31, 2022, its consolidated revenue from operations was at ₹9,363.41 crore.
(With PTI inputs)
