Ceat Ltd. reported a strong improvement in profitability in the March quarter, with operating margins crossing the 14% mark, driven by a favourable product mix and scale benefits across key segments.
The company’s consolidated revenue for Q4 FY26 rose 23% year-on-year to Rs 4,219 crore, while net profit surged to Rs 244 crore. EBITDA margin expanded to 14.18% and for the full year, CEAT posted revenue of Rs 15,678 crore, up 18.6%, with net profit at Rs 697 crore and EBITDA margin at 13.16%.
The margin expansion was largely led by growth in higher-margin categories such as two-wheelers, passenger vehicles and specialty tyres, along with strong traction in exports.
What did Kumar Subbiah say?
“Growth was strong year-on-year across most segments led by scale in the right categories that include two-wheelers, passenger vehicles and specialty tyres, which are margin accretive. International business also grew over 25% in Q4,” said Kumar Subbiah, Chief Financial Officer & Executive Director Ceat Limited.
Sequential stability in raw material costs and lower input costs on a year-on-year basis also supported margins during the quarter. “Scale and the right mix helped in improving operating margins,” he added.
However, the company expects cost pressures to re-emerge in the near term. “Crude oil prices have been above USD 100, natural rubber prices have increased, and currency depreciation is also a factor,” Subbiah said, indicating that input costs will remain elevated in the first quarter and part of the second quarter.
To offset this, CEAT has initiated price increases. “We have taken about 3% increase so far and expect to reach around 5%, but there will be a lag between cost increases and price hikes, which will impact margins,” he noted.
Broad based demand
Demand remains broad-based, with momentum across replacement, OEM and export segments. The company’s revenue mix stands at 50% replacement, 30% OEM and 20% international business, with OEM growth supported by new product approvals, particularly in higher-end tyres.
Capacity utilisation remains high at over 95%, prompting ongoing expansion across categories. CEAT expects to step up capital expenditure to around Rs 1,200 crore, as it continues to invest in capacity to support growth.