Back on the road

Harsh Goenka, chairman of RPG Enterprises, seems to be buying into the turnaround of group company Ceat, literally. The tyre major swung into the black with a profit of Rs 55 crore for the nine months of the current fiscal against a loss of Rs 30 crore in the corresponding period of the previous fiscal. In fact, Q3 profit almost tripled to over Rs 22 crore on the back of orders from automotive OEMs as revenues rose 12% to Rs 1,245 crore, while lower rubber prices improved margins. Goenka has been buying shares from the open market through Instant Holdings and Summit Securities. The latest purchase of 20,000 shares by Instant and 36,579 shares by Summit have come at an average cost of Rs 94. In doing so, Summit increased its holding to 2.63% from 2.32%, while Instant’s stake rose from 14.98% to 15.04%. Meanwhile, Ceat is looking at pruning its leverage of over Rs 1,200 crore by selling land parcels and looking to save on octroi of around Rs 18 crore annually by shifting its plant from Bhandup to Ambernath on the outskirts of Mumbai. How much these measures will help the company retain the momentum is to be seen, given that the auto industry is dealing with its worst downturn in a decade.