CEAT Profit Declines 27 PC to Rs 98 Cr in June Quarter

Mumbai: RPG Group firm and tyre maker CEAT Ltd on Thursday reported a 27 per cent decline in standalone net profit to Rs 98 crore in the June quarter of 2026 compared to the year-ago period.

The company had posted a standalone net profit of Rs 135 crore in the first quarter of FY2025-26, according to a regulatory filing.

Revenue from operations was at around Rs 4,163 crore in the June quarter, up 18 per cent from Rs 3,521 crore in the first quarter of FY26.

The company said its Board of Directors has approved a Rs 1,205-crore investment plan for capacity expansion in the two-wheeler segment to support future growth opportunities.

The company plans to add capacity by 53,000 tyres per day in a phased manner by FY 2031, up from the current 80,000 tyres per day, it said.

The proposed expansion would be funded through a mix of internal accrual and debt, CEAT said.

It also said that existing capacity utilisation is around 95 per cent of installed capacity.

“Q1 was a challenging quarter for the industry. The continuing West Asia crisis led to significant raw material cost inflation, which weighed on our gross and operating margins. We responded with calibrated price increases to partly offset the impact, while staying focused on demand and market share,” said Arnab Banerjee, Managing Director and Chief Executive Officer at CEAT Limited.

Despite these pressures, CEAT delivered strong double-digit revenue growth of 22% year-on-year, supported by healthy demand across segments and high-capacity utilisation, he said.

“As we enter Q2, we will continue to take a disciplined approach to pricing while staying focused on profitable growth,” Banerjee added.

Kumar Subbiah, CFO of CEAT Limited, said that commodity cost inflation due to the West Asia War had a significant impact on the company’s raw material costs, leading to a drop in its Q1 margins.

“We have taken cumulative price increases of 5 per cent. We expect raw material costs to remain at an inflated level in Q2 and hence, we will continue to balance our pricing actions and cost prudence to progressively mitigate the impact on our margins,” he said.

The company remained invested in its capex to the tune of Rs 300 crores, largely to enhance its capacity to meet the business plan, while maintaining tight control over discretionary expenses and routine capex to conserve cash and ensure profitability, he added.

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