Earnings Review
CEAT Q1 PAT misses Street view on higher cost of materials
This story was originally published at 21:16 IST on 16 July 2026
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--CEAT Apr-Jun net profit INR 980 mln
--Analysts saw CEAT Apr-Jun net profit INR 1.06 bln
--CEAT Apr-Jun revenue INR 41.63 bln
--Analysts saw CEAT Apr-Jun revenue INR 43.64 bln
--CEAT Apr-Jun net profit INR 980 mln vs INR 1.35 bln year ago
--CEAT Apr-Jun revenue INR 41.63 bln vs INR 35.21 bln year ago
--CEAT Apr-Jun cost of materials INR 28.80 bln vs INR 22.39 bln year ago
--CEAT to spend INR 12.05 bln on capacity addition project
--CEAT plans to add 53,000 tyres/day capacity in phases by FY31-end
--CEAT: Adding capacity as Nagpur plant nearing full utilisation
--CEAT Apr-Jun operating margin 9.13% vs 11.11% year ago
--CEAT MD: Apr-Jun was challenging due to raw material cost inflation
--CEAT MD: Announced price hikes in Q1 to partially offset higher input cost
--CEAT MD: As we enter Q2, we will take disciplined approach to pricing
--CEAT CFO: Took cumulative price increases of 5% in Apr-Jun
--CEAT CFO: Expect raw material costs to be at inflated level in Jul-Sept
--CEAT: INR 12-bln capex is for expanding capacity of two-wheeler tyres
By Pratyush Kumar
MUMBAI – Tyre manufacturer CEAT Ltd. Thursday reported a sharp on-year fall in net profit for the June quarter, weighed down by higher costs of raw materials. The company missed analysts' consensus estimate of INR 1.06 billion for net profit. CEAT also missed the Street's revenue expectations for the quarter.
CEAT reported a net profit of INR 980 million for the June quarter, down over 27% on year and 65% sequentially. The net profit fell after three strong quarters.
The tyre-maker's revenue from operations rose over 18% on year and over 3% on quarter to INR 41.63 billion. It was lower than the consensus estimate of INR 43.64 billion.
"Q1 was a challenging quarter for the industry," Arnab Banerjee, managing director and chief executive officer, said in a press release. "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."
CEAT's total expenses for the June quarter climbed over 20% on year to INR 40.50 billion. Cost of materials consumed rose nearly 29% on year to INR 28.80 billion. Other expenses grew over 12% to INR 7.65 billion.
The RPG Group company's earnings before interest, tax, depreciation, and amortisation for the June quarter were INR 3.8 billion. Its EBITDA margin for the quarter was 9.13%.
"Commodity cost inflation due to West Asia War had a significant impact on our raw material costs leading to drop in our Q1 margins," Kumar Subbiah, chief financial officer, said. "We have taken cumulative price increases of 5%. We expect raw material costs likely to remain at 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."
The company plans to invest INR 12.05 billion in phases by the end of the financial year 2030-31 (Apr-Mar) to expand capacity in the two-wheeler segment by 53,000 tyres per day. The company is planning the capacity addition as its plant at Nagpur is close to full utilisation.
CEAT announced its June quarter results after market hours. Its shares closed at INR 3,829.60 on the National Stock Exchange, up 1% from Wednesday. End
Edited by Rajeev Pai
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