COLOUR-CHEM-Modernisation and Expansion

EPW Research Foundation CEAT Buoyant Demand CEAT, the flagship company of the R P Goenka group, witnessed encouraging offtake of its tyres during its financial year 1994-96 (18 months period). Although the figures for the two years are not directly comparable, on an annualised basis, the company's net sales improved by 21.5 per cent (all percentages on annualised basis) and value of production increased by 27.4 per cent over 1993-94 (15 months period). However, a sharp increase in manufacturing expenses (up 36.1 per cent) and other operating expenditure led to a lower increase in operating profit which improved by 15.6 per cent. Despite a mere 7.2 per cent increase in interest charges and a 37.8 per cent fall in depreciation provision over the previous year, the company's net profit plunged drastically by 44.2 per cent over the previous year, thanks to a 40.2 per cent increase in tax provision.