CEAT has announced ambitious expansion plans with a significant investment in its Chennai manufacturing facility. The tyre manufacturer is set to strengthen its production capabilities through strategic capacity enhancement initiatives.

Major Investment in Chennai Facility

The company has outlined plans to invest ₹1,314 crores in its Chennai manufacturing facility. This substantial investment represents a major commitment to expanding the company's manufacturing footprint and production capabilities.

Production Capacity Enhancement

As part of this expansion initiative, CEAT plans to increase its annual tyre production capacity by 3.5 million units. This capacity addition is expected to significantly boost the company's manufacturing output and market supply capabilities.

Strategic Growth Initiative

This investment initiative reflects CEAT's commitment to expanding its manufacturing capabilities and strengthening its position in the tyre industry. The Chennai facility expansion is positioned to enhance the company's production efficiency and market reach through increased manufacturing capacity.

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.