Mumbai: Tyre manufacturer CEAT Limited reported a 22% year-on-year rise in consolidated revenue to ₹4,318 crore for the quarter ended June 30, 2026, even as higher raw material costs compressed margins and reduced consolidated net profit to ₹4 crore.
The RPG Group company said its consolidated EBITDA margin stood at 8.56% during the first quarter of the 2026-27 financial year. CEAT attributed the pressure on profitability largely to commodity price inflation linked to the continuing crisis in West Asia.
Despite the margin squeeze, the company recorded double-digit revenue growth, supported by healthy demand across business segments and high capacity utilisation.
Commenting on the quarterly results and business outlook, Arnab Banerjee, Managing Director and Chief Executive Officer of CEAT Limited, said, “Q1 was a challenging quarter for the industry. 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.
Despite these pressures, CEAT delivered strong double-digit revenue growth of 22% year-on-year, supported by healthy demand across segments and high-capacity utilisation. As we enter Q2, we will continue to take disciplined approach to pricing while staying focused on profitable growth.”
On a standalone basis, CEAT reported revenue of ₹4,163 crore, an increase of 18% year-on-year. Its standalone EBITDA margin was 9.13%, while net profit stood at ₹98 crore.
The company has implemented cumulative price increases of 5% to partly offset the rise in input costs. However, management expects raw material prices to remain elevated during the second quarter, suggesting that the balancing act between pricing, demand and profitability is not over yet.
Kumar Subbiah, Chief Financial Officer of CEAT Limited, said, “Commodity cost inflation due to West Asia War had a significant impact on our raw material costs leading to drop in our Q1 margins. 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. Our performance across other key parameters, however, remained satisfactory. We stayed invested on our capex to the tune of ₹ 300 crores largely to enhance our capacities to meet our business plan while maintaining tight control over discretionary expenses and routine capex to conserve cash and ensure profitability.”
CEAT invested around ₹300 crore in capital expenditure during the quarter, primarily to expand capacity in line with its business plans. At the same time, the company said it maintained tight control over discretionary spending and routine capital expenditure to conserve cash.
In a significant expansion move, CEAT’s board approved an investment of ₹1,205 crore to increase production capacity in the two-wheeler tyre segment. The investment is intended to support future growth opportunities in the category.
The capacity-expansion approval indicates that CEAT remains confident about longer-term demand, despite near-term pressure from commodity prices. For the coming quarters, the company’s performance is likely to depend on how effectively it can pass on higher costs without slowing sales—a familiar industry challenge, though rarely one that can be solved simply by adding more air.
