Tyre maker Ceat on reported a decline of 17.38 per cent in consolidated net profit at Rs 93.07 crore for the quarter ended 30th June, FY16-17. The company had reported a net profit of Rs 112.65 crore during the corresponding quarter of the previous financial year.
However, on 5th August 2016 (today) Ceat share price zoomed up by 5.98 per cent to close at Rs 908.90. The share price opened at Rs 866.80 from a previous closing of Rs 857.60. The intraday high and the intraday low were Rs 918.80 and Rs 858.00 respectively.
Net sales of the company hicked to Rs 1,460.92 crore for the quarter ended 30th June 2016 as against Rs 1,404.15 crore during the same period of the previous financial year, Ceat Ltd said in a BSE filing.
Managing Director of Ceat Ltd Anant Goenka said that the margins have declined largely due to higher investment in the brand and some price drops that were passed on to the consumers. The company has also seen strong growth in the domestic market with volume growth of over 15 per cent aided by the company's focus on the passenger segments.
The market analysts feel that this is the impact of GST bill that was tabled in Rajya Sabha earlier in the week.
It is believed that the rubber products units, which are currently suffering due to multiple taxes, will be beneficial by GST as a single tax could replace several taxes.
As per Mohinder Gupta, president of All India Rubber Industries Association the sector currently have to pay excise duty, service tax, VAT etc. All these could be replaced by a single tax which could be close to what they are paying now. But the processing will be easier and clerical work will be considerably reduced as it is a single tax
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