MUMBAI, India (May 10, 2011)—Ceat Ltd. suffered an 86-percent drop in earnings for the year ended March 31 on 23.6-percent higher sales, as the rising costs of raw materials took their toll on the Indian tire maker's bottom line.
Net earnings slid to $7.3 million on sales of $760.2 million, for an earnings ratio of less than 1 percent. Pre-tax operating income fell 61.5 percent to $23.5 million as expenditures rose 33.5 percent; spending on raw materials jumped 54 percent, CEAT said.
One of the major highlights for the year was the commissioning of the Halol radial tire project in Gujarat, India, which is expected to contribute substantially to the bottom line. The state-of-the art radial plant is designed for a capacity of 150 metric tons of output per day and will be fully functional by the third quarter of FY12.
Ceat, whose tires are handled in North America by Tyres International Inc., also aims to double motorcycle tire sales to 500,000 units a month by the end of fiscal 2012 through increased outsourcing.