CEAT Limited delivered exceptional Q3FY26 financial results for the quarter ended December 31, 2025, demonstrating robust operational performance with significant profit growth across all business segments. The RPG Group company reported consolidated net profit of ₹155.70 crores, marking a substantial 60.30% year-on-year increase from ₹97.10 crores in the corresponding quarter last year.

Strong Financial Performance Metrics

The company's consolidated revenue reached ₹4,157.00 crores for the quarter, representing a robust 26.00% year-on-year growth from ₹3,301.00 crores. EBITDA performance was particularly impressive, with the EBITDA margin improving to 13.66% for the quarter. On a standalone basis, CEAT reported revenue of ₹3,957.00 crores with 20.00% year-on-year growth, EBITDA margin of 14.08%, and net profit of ₹192.00 crores.

Major Capacity Expansion at Chennai Plant

CEAT announced a significant capacity expansion initiative at its Chennai plant located in Kannanthangal, requiring an investment of ₹1,314.00 crores. The expansion aims to add 35 lakh tyres per annum capacity by the first half of FY28, increasing the existing capacity from 95 lakh tyres per annum.

The expansion reflects CEAT's expectation of strong demand growth in the passenger car and utility vehicle category and positions the company to capitalize on anticipated future market opportunities.

Debt Management and Financial Strategy

During the quarter, CEAT undertook strategic debt management initiatives, repaying ₹100.00 crores in listed secured non-convertible debentures while issuing ₹250.00 crores in unsecured NCDs on a private placement basis. As of December 31, 2025, the company maintains ₹400.00 crores in outstanding NCDs and ₹600.00 crores in commercial papers, with debt levels remaining consistent with the previous quarter.

Management Commentary and Market Outlook

MD & CEO Arnab Banerjee highlighted that the quarter was supported by strong revenue growth across all segments, aided by GST rate reductions that boosted domestic market sentiment. He noted emerging opportunities in international markets and expressed confidence that positive momentum would continue into the next quarter. CFO Kumar Subbiah emphasized that strong top-line growth drove operating leverage and margin improvement, supported by stable commodity prices that helped sustain gross margins.

Exceptional Items and Strategic Positioning

The company recognized exceptional items totaling ₹58.00 crores during Q3FY26, primarily related to provisions for obligations arising from the New Labour Codes notified by the Government of India. CEAT, part of the RPG Group, manufactures over 48 million high-performance tyres annually across segments including two-wheelers, passenger vehicles, commercial vehicles, and off-highway vehicles.

CEAT Limited delivered robust financial performance in Q3FY26, demonstrating strong growth momentum across all business segments. The tyre manufacturer reported consolidated revenue of ₹4,157 crores for the quarter ended December 31, 2025, representing a significant 26% year-on-year increase.

Financial Performance Highlights

The company's financial metrics showed substantial improvement across key parameters. On a standalone basis, CEAT achieved revenue of ₹3,957 crores, marking a 20% year-on-year growth, while maintaining healthy profitability margins.

Major Capacity Expansion Initiative

CEAT announced a substantial capacity expansion plan at its Chennai plant located at Kannanthangal, Maduramangalam Post, Sripurumbudur TK, Kancheepuram. The expansion represents a strategic investment to capitalize on anticipated growth in the passenger car and utility vehicle (PCUV) segment.

Operational Performance and Market Dynamics

The company's strong performance was supported by favorable market conditions, including GST rate reductions that improved domestic market sentiment. Management highlighted opportunities emerging in international markets, contributing to the overall growth trajectory.

CEAT's nine-month performance for FY26 showed consolidated revenue of ₹11,459 crores compared to ₹9,810 crores in the corresponding period of the previous year. The company maintained its market leadership position across various tyre segments including two-wheelers, passenger vehicles, commercial vehicles, and off-highway vehicles.

Financial Impact of Regulatory Changes

The company recognized exceptional items totaling ₹58 crores during the quarter, primarily related to the implementation of new labour codes notified by the Government of India effective November 21, 2025. This provision was made based on actuarial valuation and represents incremental obligations under the new regulatory framework.

Strategic Outlook and Management Commentary

Managing Director and CEO Arnab Banerjee expressed confidence in the company's performance, stating that strong revenue growth across all segments and improved market sentiment position CEAT well for sustained momentum. CFO Kumar Subbiah emphasized that operating leverage from top-line growth led to margin improvements, while stable commodity prices supported gross margin sustainability.

The company continues to maintain its capital expenditure program to support growth initiatives, primarily funded through internal accruals. CEAT's debt levels remained stable compared to the previous quarter, reflecting disciplined financial management while pursuing expansion opportunities.