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Time of India
18-07-2025
- Automotive
- Time of India
CEAT to spend 450cr to expand Chennai plant
Chennai: Tyre major CEAT is planning a capacity expansion at its Chennai plant that manufactures truck and bus radials (TBR) and passenger car radials (PCR). The company is lining up a capex of 450 crore, said officials. Kumar Subbiah, CFO, said: "Our planned capex (for FY25-26) was around 900 crore, but our board has approved an additional 450 crore for capacity expansion at our Chennai plant. So, the total capex cash outflow for this year would be in the 1,000cr-1,050 crore range." The 450 crore, he said, will be spent over two years. "In the current fiscal, the cash outlay from that amount will be 100cr-150cr." This new capacity addition is for PCR tyres. "When we originally set up the Chennai plant, we planned for a capacity of 28,500 PCR tyres per day," said Subbiah. "However, tyre weights have been increasing because of a shift toward SUVs and larger vehicles. Even smaller vehicles are now being fitted with bigger tyres. So, although the plant was designed for 28,500 tyres/day, current tyre weights have reduced the actual output of the number of tyres to 22,500-23,000 tyres/day in terms of units." by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Exciting Offers on vivo X200 FE ViVO X200 FE Book Now Undo The new expansion will increase upstream capacity by 80 tonnes/day, allowing CEAT to produce around 30,000 tyres/day. (Upstream capacity refers to processes like mixing, calendaring, and tyre building — basically tonnage-based inputs. Downstream involves curing and handling, which are measured by number of tyres.) This will ensure upstream and downstream align to achieve the 30,000 tyres/day target. You Can Also Check: Chennai AQI | Weather in Chennai | Bank Holidays in Chennai | Public Holidays in Chennai And, more people will be needed. "We've already been adding people continuously and last Sept, we commissioned a new TBR plant there, which is ramping up well," said Subbiah. "PCR production is also increasing. We had originally committed to the TN govt that we would create 1,000 direct jobs. Today, we have already crossed 1,500. With the ongoing capacity expansion, that number will go up." The expansion will be funded through a mix of internal accruals and debt. CEAT saw its profit after tax for Q1FY26 drop to 135.5 crore, down by 9% compared to 149.24 crore in the year ago period.
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Business Standard
18-07-2025
- Automotive
- Business Standard
Tyre industry to grow 7-8% in FY26, driven by replacement demand: Crisil
India's Rs 1 trillion tyre industry is expected to post a steady revenue growth of 7–8 per cent in FY26, driven largely by robust replacement demand, which accounts for nearly 50 per cent of the sector's annual sales, according to Crisil Ratings. Rising premiumisation trends are also expected to aid realisations marginally, even as original equipment manufacturer (OEM) offtake remains subdued and global trade headwinds cloud the outlook. Crisil forecasts volume growth at 5–6 per cent, similar to the last fiscal. The replacement segment is expected to grow 6–7 per cent on the back of a large vehicle base, rural recovery, and strong freight movement. OEM volumes, which contribute roughly 25 per cent, are projected to rise 3–4 per cent, buoyed by steady sales in two-wheelers and tractors, with modest gains from passenger and commercial vehicles. Exports, also contributing 25 per cent of volumes, are likely to grow 4–5 per cent, supported by demand from Europe, Africa, and Latin America. Tyre maker Ceat sees signs of optimism. 'We expect raw material prices to decline by 1–2 per cent in Q2 over Q1, largely due to softening crude oil and international rubber prices,' said Kumar Subbiah, CFO and Executive Director of Ceat. 'If demand stays stable, this could positively impact our margins. The trend looks encouraging, and we are hopeful of margin recovery.' Crisil also pointed out that operating profitability is expected to remain stable at 13–13.5 per cent, supported by steady input costs and high capacity utilisation. Input cost pressure has been easing, offering some relief to manufacturers. Natural rubber prices had surged 8–10 per cent in FY25, alongside increases in crude-linked inputs like synthetic rubber and carbon black, eroding margins by nearly 300 basis points. However, the industry faces external risks. The US, which made up 17 per cent of India's tyre export volume last fiscal (and 4–5 per cent of total industry volume), has imposed reciprocal tariffs on Indian goods, potentially hurting competitiveness. Moreover, steep US tariffs on Chinese goods could push Chinese producers to dump excess inventory in price-sensitive markets like India. Although India has a 17.57 per cent anti-dumping duty on large truck and bus radials from China, other segments remain vulnerable. 'Price competition could intensify if low-cost Chinese tyres flood the Indian market,' warned Poonam Upadhyay, Director at Crisil Ratings. 'This is particularly worrying for the already competitive replacement segment.' Despite ongoing cost pressures, the sector's financial resilience remains strong, aided by conservative balance sheets and prudent capital spending. Capex is expected to remain steady at around Rs 6,000 crore, focused on high-utilisation segments such as passenger car radials and two-wheeler tyres, automation, and backward integration. The top six tyre makers, who account for 85 per cent of industry revenue, are expected to maintain a healthy financial profile, with interest coverage improving to 8.0 times and debt-to-Ebitda ratio easing to 1.0 from 1.3 last year.
Business Standard
18-07-2025
- Business
- Business Standard
Ceat slips after Q1 PAT slides 27% YoY to Rs 112 cr
Ceat fell 1.67% to Rs 3,790.80 after the company's net profit declined 27.06% to Rs 112.45 crore on a 10.54% increase in revenue to Rs 3,529.41 crore in Q1 FY26 over Q1 FY25. The revenue growth was driven by a strong performance in both the OEM (Original Equipment Manufacturer) and replacement segments. The company reported profit before exceptional items and tax of Rs 159.04 crore in Q1 FY26, compared to Rs 195.41 crore recorded in the same period a year ago. The firm reported exceptional items of Rs 3.29 crore during the quarter. EBITDA for Q1 FY26 marginally declined 0.5% to Rs 386.2 crore, compared to Rs 388.2 crore in Q1 FY25. EBITDA margin reduced to 10.9% during the quarter as against 12.2% in the same quarter the previous year, primarily due to an increase in raw material (RM) costs. On the margins front, the company's operating margin reduced to 10.94% in Q1 FY26, compared with 12.16% recorded in Q1 FY25. Net profit margin declined to 3.18% in Q1 FY26 from 4.83% registered in Q1 FY25. In Q1 FY26, capital expenditure (capex) amounted to approximately Rs 231 crore. Arnab Banerjee, MD & CEO, CEAT, stated, We continue to grow at a strong pace with double-digit growth in top-line, driven by OEM and replacement segments. Looking ahead, we are well poised to ride the premiumization and electrification trend in the domestic market and renew our growth in international markets with stability in the geopolitical situation. Kumar Subbiah, CFO of CEAT, said, "Q1 saw strong growth and high-capacity utilization at all our manufacturing facilities. This growth came on the back of an increase in demand from OEM and replacement segments. As Q1 is a marketing-heavy quarter with significant marketing costs associated with IPL, operational margins saw a slight dip. Efficient cash flow management helped in gross debt coming down by Rs 100 crore during the quarter. Meanwhile, the board has approved the reappointment of Arnab Banerjee as managing director and CEO for another two-year term, starting 1 April 2026, pending shareholder approval. Additionally, CEAT announced a capital expenditure plan of around Rs 450 crore to expand its Chennai plant located at Kannanthangal, Sriperumbudur, in Kancheepuram district. The plant currently operates at 80% capacity and produces about 70 lakh tires annually. The planned expansion, expected to be completed by the end of FY27, aims to increase production capacity by roughly 35%, particularly in the Passenger Car Utility Vehicle (PCUV) segment. The investment will be financed through a combination of internal funds and debt. CEAT anticipates strong medium-term growth in the PCUV segment and plans to boost capacity to meet growing demand. CEAT, the flagship company of RPG Enterprises, is one of India's leading tire manufacturers and has a strong presence in global markets. CEAT produces more than 41 million high-performance tires, catering to various segments like 2-wheelers, passenger and utility vehicles, commercial vehicles, and off-highway vehicles.
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Business Standard
17-07-2025
- Automotive
- Business Standard
Ceat Q1FY26: Profit declines 27% on higher costs, revenue rises 10.5%
RPG Group-owned tyre maker Ceat on Thursday reported a 27 per cent decline year-on-year (Y-o-Y) in its consolidated net profit for the first quarter (Q1) of 2025–26 (FY26), whereas revenue from operations rose 10.5 per cent. The decline in net profit was primarily attributed to higher marketing expenses and an increase in raw material costs. Sequentially, both net profit and revenue saw an increase of 13 per cent and 3 per cent, respectively. Arnab Banerjee, Managing Director and Chief Executive Officer, Ceat, stated, 'Looking ahead, we are well poised to ride the premiumisation and electrification trend in the domestic market, and renew our growth in international markets with stability in the geopolitical situation.' Kumar Subbiah, Chief Financial Officer, Ceat, said, 'Q1 saw strong growth and high-capacity utilisation at all our manufacturing facilities. This growth came on the back of increase in demand from OEM and replacement segments. As Q1 is a marketing-heavy quarter with significant marketing costs associated with IPL, operational margins saw a slight dip.' The results came after market hours on Thursday. Shares of the company closed at Rs 3,855.2, down 0.49 per cent.
New Indian Express
30-04-2025
- Automotive
- New Indian Express
CEAT targets double-digit growth in FY26; Plans ₹1,000 crore capex
Despite macroeconomic and global challenges affecting the tyre industry, India's leading tyre manufacturer CEAT Ltd expects a double-digit growth in revenue in FY2025-26. 'In the fiscal and the quarter (Q4FY25) gone by, we delivered double-digit growth. We would have grown higher than the industry in FY25. While there are some macroeconomic challenges like the US tariff, we are again targeting double-digit growth in FY26,' Kumar Subbiah, CFO of CEAT, told The New Indian Express . The company reported a 14.3% year-on-year rise in Q4 revenue to ₹3,420.6 crore, up from ₹2,991.9 crore in the same quarter last year. However, net profit declined 8.4% to ₹99.5 crore compared to ₹108.6 crore in Q4 FY24. Despite this, CEAT's shares surged 8% on Wednesday, reflecting investor optimism. Subbiah highlighted strong growth in the replacement market (55% of revenue) and international business (20% of revenue) last fiscal. The company aims to increase its overseas revenue share to 25% in the next two years. For FY26, CEAT has earmarked ₹900-1,000 crore in capital expenditure, primarily for expanding passenger car tyre and truck/bus radial tyre capacities. This follows last year's capex of ₹946 crore. On US tariff concerns, Subbiah noted that CEAT's exposure to the US market is below 5%, minimizing potential risks. However, he cautioned that the industry must monitor whether China increases tyre dumping in global markets. 'In India, we have antidumping duty, particularly in the truck and bus radial category. As far as the Indian market is concerned, we do not see a threat of dumping. However, if Chinese tyres flood into other markets where we are also competing, then we will have to assess the impact,' he said. Talking about softening raw material prices, the CFO said that crude oil prices are currently hovering at about $65 level and international natural rubber prices, even though higher than last year, has seen a correction of about 10% in recent months. 'The impact of softening raw material prices may be seen in the coming months,' he stated.
