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Informist, Wednesday, Jul. 15, 2026

 

By Pratyush Kumar

 

MUMBAI - Tyre maker CEAT Ltd. is expected to report a lower net profit for the June quarter due to higher raw material costs driven by a surge in natural rubber prices, according to brokerages tracking the company. The rise in crude oil prices due to the war in West Asia will also hurt the company's net profit.

 

CEAT is likely to post a net profit of INR 1.06 billion for the June quarter, down 23% on year and 64% sequentially, according to the average of estimates from nine brokerages. The highest estimate for the net profit is INR 1.41 billion from Elara Securities (India) Pvt. Ltd. and the lowest is INR 819 million from Nomura Equity Research. 

 

The tyre manufacturer is expected to report net sales of INR 43.64 billion for the June quarter, up nearly 24% on year and 8% sequentially. The highest estimate for net sales is INR 45.01 billion from ICICI Securities Ltd. and the lowest is INR 42.24 billion from Nirmal Bang Equities Pvt. Ltd.

 

CEAT's net profit is likely to decline due to significant cost pressures and higher depreciation resulting from the acquisition of the Michelin Group company Camso, Motilal Oswal said. Camso, acquired in September, is expected to have a quarterly revenue run rate of $25 million, the brokerage added. Camso is likely to contribute around 5-6% to the company's revenue growth, Kotak said. CEAT is yet to consolidate Camso's financials with its own.

 

CEAT's revenue for the June quarter is expected to grow on the back of a 16% on-year growth in volumes for original equipment manufacturers, replacements, and exports, Kotak said. Indian business is expected to lead CEAT's revenue growth for the June quarter, Nomura said. The company is expected to post a 1% on-quarter volume growth because demand for radial tyres for two-wheelers, trucks, and buses remained strong in the June quarter, whereas replacement demand for passenger car radial tyres was down, JM Financial Institutional Securities Pvt. Ltd. said.

 

CEAT is expected to report earnings before interest, tax, depreciation, and amortisation of INR 3.92 billion, according to the average of eight estimates. The highest estimate for EBITDA is INR 4.34 billion from ICICI Securities and the lowest is INR 3.64 billion from JM Financial. 

 

The demand for tyres remained healthy in the June quarter despite multiple rounds of price hikes in the replacement segment, Motilal Oswal said. The brokerage expects the company's EBITDA margin to contract 250 basis points on-year due to high input costs, which increased by up to 20% on quarter. Sequentially, it is likely to fall 450-580 bps, according to brokerage estimates. The company's standalone EBITDA margin for the June quarter is expected at 9%, Nomura said.

 

After the ceasefire between the US and Iran, crude oil prices have declined sharply, while rubber prices began to decline toward the end of June, which should support sequential margin improvement from the September quarter onwards, Kotak said.

 

CEAT will announce its June quarter results Thursday. Investors will track the demand for replacement, exports to Europe, and raw material costs, Nirmal Bang said. The company had reported a net profit of INR 2.93 billion for the March quarter on revenues of INR 40.35 billion. The stock is up nearly 8% since the company announced its March quarter earnings on Apr. 28. 

 

On Wednesday, CEAT shares ended at INR 3,789.10 on the National Stock Exchange, up 1.9% from the previous session.

 

Of the nine brokerage reports on the company available with Informist, five have a 'buy' recommendation on the stock with an average target price of INR 4,315, which is nearly 14% higher than the current market price. Three brokerages have a 'hold' recommendation on the stock with an average target price of INR 3,777. One brokerage has a 'sell' recommendation on the stock at a target price of INR 3,600. 

 

The Following are the Apr-Jun quarter earnings estimates, in INR million, for CEAT from nine brokerages in descending order of the net profit estimate: 

 

Brokerage	Net sales	Net profit	EBITDA
Elara Securities (India) Pvt. Ltd.	43,232	1,414	3,934
ICICI Securities Ltd.	45,010	1,318	4,344
Nirmal Bang Equities Pvt. Ltd.	42,236	1,115	3,931
Kotak Securities Ltd.	44,523	1,084	4,212
Anand Rathi Share and Stock Brokers Ltd.	43,876	1,041	--
Nuvama Wealth Management Ltd.	43,048	985	3,674
JM Financial Institutional Securities Pvt .Ltd.	44,335	954	3,635
YES Securities (India) Ltd.	42,410	852	3,798
Nomura Equity Research	44,132	819	3,842
Average	43,644	1,064	3,921

 

End

 

US$1 = INR 96.25 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Saji George Titus

 

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