Ceat tyres set to ride on youth
Ceat Ltd, India's largest tyre-maker for the replacement market, is making major changes in its management structure.
For starters, the company has put together a team of managers in the early twenties to build on its new brand presence, which was unveiled on Tuesday by Harsh V Goenka, Chairman, RPG Group.
The Mumbai-based Rs 2,600-crore sales company is on the path to try and take on a multinational tyre companies and a rejuvenated Indian tyre industry.
The new buzzword in the corridors of Ceat's Worli, Mumbai office is 'young'. Ceat has hired a number of youngsters for its middle management, and sources indicated that there could be a new face in the top management too. However, this could not be officially confirmed.
Nitin Nair, Jaideep Shah, Priyanka Bhatt and Gaurav Phull, all in their early and mid-twenties, are just four of a new team of people who are responsible for taking Ceat's new brand image to its customers. And they say their customers — the truck owners — are also changing. Gone are they days when they would bargain for deals. "They now ask what the cost per kilometre would be for our tyres, and not how rugged they are," said Nair.
"There is a definite change in the philosophy of the company and the way it is going to be run, we are targeting a young country and that is going to show up in the way Ceat is run in the future," said 36-year old Rahul Ghatak, vice president (human resources) for Ceat.
The company is close to setting up a factory at Ambernath near Mumbai, for which the company would spend some Rs 550 crore.
Most of the employees at Bhiwandi would be shifted to this facility, while the older ones would be offered voluntary retirement.
Analysts however, feel that the structural changes in the company may not be enough to bolster Ceat's share price. However, Ceat and its peers are still a value buy, said Aniket Mhatre, analyst, Prabhudas Lilladher.
"Even if rubber prices stay where they are, Ceat and its peers no longer are trying to increase their market share. Instead, they are now commanding a premium over the market unlike a few years back," Mhatre said.
Ceat's share price on the BSE closed at Rs 124.55 Wednesday, up 19.93 per cent from Tuesday’s close.