CEAT Limited , a leading Indian tyre manufacturer, has announced its financial results for the first quarter, showcasing strong top-line growth amidst margin pressures.

Revenue Growth and Market Performance

CEAT reported a consolidated revenue of Rs. 3,529.40 crore for Q1, marking a robust 10.5% year-on-year increase. The company witnessed healthy volume growth, particularly in the OEM (Original Equipment Manufacturer) and replacement segments. The OEM segment demonstrated strong performance across all key categories, while realizations improved on a year-on-year basis.

Profitability and Margins

Despite the revenue growth, CEAT's profitability faced some headwinds:

• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin stood at 10.9%, contracting by 122 basis points year-on-year.
• Net profit declined by 27.2% year-on-year to Rs. 112.30 crore.

The company attributed the margin contraction to an increase in the raw material basket compared to the previous year and higher marketing expenses associated with IPL (Indian Premier League) during the quarter.

Operational Highlights

Mr. Arnab Banerjee, MD & CEO of CEAT Limited, commented on the results: "We continue to grow at a strong pace with double-digit growth in top-line, driven by OEM and replacement segments. Looking ahead, we are well poised to ride the premiumisation and electrification trend in domestic market, and renew our growth in international markets with stability in geopolitical situation."

Key operational highlights for the quarter include:

• High capacity utilization across all manufacturing facilities
• Capex of approximately Rs. 231 crore, fully funded through internal accruals
• Reduction in gross debt by Rs. 100 crore during the quarter

Financial Position

CEAT's financial position as of the end of the quarter:

Future Outlook

The company remains optimistic about its future prospects, focusing on:

1. Premiumisation and electrification trends in the domestic market
2. Renewed growth in international markets, contingent on geopolitical stability
3. Continued investment in capacity expansion, with plans to increase PCUV (Passenger Car and Utility Vehicle) capacity at its Chennai plant by 35% by the end of FY 2027

Sustainability Initiatives

CEAT has also made strides in its sustainability efforts:

• Commitment to science-based Net-Zero emissions reduction targets
• ~42% of plant power sourced from renewable sources
• Awarded the EcoVadis Silver Medal, placing CEAT in the 89th percentile globally for sustainability performance

As CEAT navigates through a dynamic market environment, the company's focus on revenue growth, operational efficiency, and sustainability initiatives positions it to capitalize on emerging opportunities in the automotive tyre sector.

CEAT Limited , a leading Indian tyre manufacturer, has announced its financial results for the first quarter, showcasing revenue growth but a decline in profit.

Q1 Financial Highlights

CEAT reported a 9% decrease in standalone net profit for Q1, falling to Rs 135.35 crore from Rs 149.24 crore year-over-year. However, the company's revenue increased by 11.1% to Rs 3,520.70 crore. EBITDA rose slightly by 2% to Rs 391.05 crore, with margins at 11.1%. These results fell short of Bloomberg analyst estimates.

Growth Drivers and Market Performance

The company attributed its revenue growth to healthy volume increases across segments, particularly in OEM (Original Equipment Manufacturer) and replacement markets. CEAT's Managing Director and CEO, Mr. Arnab Banerjee, commented on the results: "We continue to grow at a strong pace with double-digit growth in top-line, driven by OEM and replacement segments. Looking ahead, we are well poised to ride the premiumisation and electrification trend in domestic market, and renew our growth in international markets with stability in geopolitical situation."

Operational Insights

CEAT's Chief Financial Officer, Mr. Kumar Subbiah, highlighted the company's operational performance: "Q1 saw strong growth and high-capacity utilisation at all our manufacturing facilities. This growth came on the back of increase in demand from OEM and replacement segments. As Q1 is a marketing heavy quarter with significant marketing costs associated with IPL, operational margins saw a slight dip. Efficient cash flow management helped in gross debt coming down by ₹100 crore during the quarter."

Capacity Expansion Plans

In a significant move to meet growing demand, CEAT has announced plans to increase capacity at its Chennai plant:

The company stated that this investment is intended to progressively add capacity to service the anticipated future demand, particularly in the PCUV category where good growth is expected in the medium term.

Leadership Renewal

CEAT's Board of Directors has approved the re-appointment of Mr. Arnab Banerjee as Managing Director & Chief Executive Officer for a further term of two years, effective from April 1, 2026, to March 31, 2028, subject to shareholder approval.

Other Notable Developments

• CEAT ranked among the Top-10 strongest global tyre brands
• Recognized as the "Procurement Team of the Year" at the 6th Nxtgen Procure Connect Confex & Awards
• Awarded the EcoVadis Silver Medal, placing CEAT in the 89th percentile among companies globally for sustainability performance

As CEAT continues to navigate a dynamic market environment, its focus on capacity expansion, operational efficiency, and sustainability positions the company for continued growth in the coming quarters, despite the challenges reflected in the Q1 results.