CEAT slips after Q1 PAT plunges 96% YoY to Rs 4 crore
The company reported profit before exceptional items and tax of Rs 39 crore in Q1 FY27, compared to Rs 159 crore recorded in the same period a year ago. The company reported an exceptional expense of Rs 7 crore during the quarter.
EBITDA for Q1 FY27 fell 4.3% to Rs 370 crore, compared to Rs 386 crore in Q1 FY26. The EBITDA margin decreased to 8.6% during the quarter as against 10.9% in the same quarter the previous year.
CEAT's board approved a capital expenditure plan for the expansion of tyre manufacturing capacity. The company currently has an installed capacity of about 80,000 tyres per day, excluding the capacity under implementation, with capacity utilisation at around 95%.
The proposed expansion will add about 53,000 tyres per day in phases by the end of FY2031. The company has estimated an investment of about Rs 1,205 crore for the capacity addition, to be funded through a mix of internal accruals and debt.
Arnab Banerjee, MD & CEO, CEAT, 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 utilization. As we enter Q2, we will continue to take a disciplined approach to pricing while staying focused on profitable growth.?
Kumar Subbiah, CFO of CEAT Limited, said, ?Commodity cost inflation due to the West Asia War had a significant impact on our raw material costs, leading to a drop in our Q1 margins. We have taken cumulative price increases of 5%. We expect raw material costs to likely remain at an 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 in our capex to the tune of Rs 300 crore 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, the flagship company of RPG Enterprises, was established in 1958. Today, CEAT is one of India?s leading tyre manufacturers and has a strong presence in global markets. CEAT produces more than 48 million high-performance tyres, catering to various segments like 2-3 wheelers, passenger and utility vehicles, commercial vehicles, and off-highway vehicles.
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