India's CEAT beats Q1 profit view on higher demand, fall in costs

BENGALURU, July 25 (Reuters) - Indian tyremaker CEAT (CEAT.NS) posted a near 16-fold jump in profit boosted by strong demand and drop in raw material costs.

The Mumbai-based companys consolidated net profit rose to 1.45 billion rupees ($17.71 million) from 92.5 million rupees a year earlier.

Analysts, on average, expected a profit of 1.28 billion rupees, according to Refinitiv IBES data.

Revenue rose 4.1% to 29.35 billion rupees, while total expenses fell 2.8%, led by a 14.3% drop in the cost of materials consumed.

Domestic two-wheeler volumes rose by about 10% year-on-year during the quarter due to healthy demand in both urban and rural areas, while the medium and commercial vehicles industry also grew about 6%, said research firm Nuvama. Domestic passenger vehicle segment volumes also grew about 10%.

The domestic tyre market is projected to grow at a CAGR of 7%-9% between CY20-24, according to CEATs annual report.

CEAT in FY2023 reported a 21% rise in revenue, despite facing global headwinds due to the Ukraine crisis as well as the devaluation of the Indian rupee.

Rivals MRF (MRF.NS), JK Tyre (JKIN.NS) and Apollo Tyres (APLO.NS) are yet to report their earnings for the quarter.