CEAT Q1FY27 Results: Profit Crashes 96.4% To ₹4 Crore Amid West Asia War

Revenue growth of around 22% could not save CEAT's bottom line in the June quarter. The tyremaker's consolidated net profit collapsed to ₹4 crore from ₹112 crore a year ago as raw material cost inflation triggered by the West Asia conflict overwhelmed the company's pricing response.

CEAT shares closed 1.07% higher at ₹3,829.60 on Thursday. The shares have risen 0.45% year-to-date. At 11:20 AM on Friday, it was trading at ₹3,534.11, down 7.22%.

Q1FY27 Performance Snapshot

• Net profit: ₹4 crore in Q1FY27 vs ₹112 crore in Q1FY26, down 96.4% year-on-year (YoY)

• Revenue from operations: ₹4,318 crore, up 22.4% from ₹3,529 crore

• Earnings before interest, tax, depreciation and amortisation (EBITDA): ₹365 crore, down 5.7% from ₹387 crore

• EBITDA margin: 8.5%, down 250 basis points from 11%

• Exceptional items: ₹7 crore

• Standalone net profit: ₹98 crore with an EBITDA margin of 9.13%

What Went Wrong

The West Asia conflict drove significant inflation in natural rubber and petrochemical-linked raw materials. CEAT responded with cumulative price increases of 5%, but that only partially offset the cost surge. Capacity utilisation was running at approximately 95%, meaning demand held up but commodity headwinds negated the volume gains entirely at the profit level.

Chief Executive Arnab Banerjee described Q1 as a challenging quarter for the entire industry. Chief Financial Officer Kumar Subbiah said raw material costs are likely to stay elevated in Q2, requiring continued pricing discipline and cost control to progressively recover margins.

The Expansion Despite The Pressure

Despite the margin pressure, CEAT committed to a significant capacity investment:

• Investment: ₹1,205 crore at its Nagpur plant

• Expected capacity addition: 53,000 tyres per day

• Existing capacity: Approximately 80,000 tyres per day

• Timeline: Phased completion by end of FY2031

• Funding: Mix of internal accruals and debt

• Q1 capex deployed: ₹300 crore

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