With the monsoon around the corner, replacing your vehicle's tyres could soon become more expensive now, as CEAT plans to raise tyre prices in the coming days amid rising input costs.
CEAT Managing Director and CEO Arnab Banerjee told NDTV Profit that the company is expected to increase prices by 3-5% in the next 15 to 20 days, with more hikes planned in July, August and September.
"We are not yet done even after the immediate 3 to 4% in the next 15 to 20 days. To maintain margins, we have to match the raw material price hike. Right now We are just trying to catch up with the per unit price but to maintain margins in terms of percentages more price increase is required. We may see cooling off of raw material because Brent is down," Banerjee said.
He expects significant erosion in margins through the first half of the current financial year, with a recovery likely only in the second half. Emphasising on margin erosion, Banerjee said, "It depends how the food prices pull off if they pull off and the industry has shown lot of evidence in the past that when the raw material prices drop off from such a steep high the industry recovers its margin." He added, "So I am very confident that CEAT will recover its margin once the raw material starts pulling up hopefully in half two."
Notably, CEAT reported a 150% surge in profit at Rs 244 crore in the fourth quarter of FY26. Consolidate revenue of the tyremaker rose 23% year-on-year for the three months ended March, reaching Rs 4,219 crore in comparison to Rs 3,421 crore.
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According to Banerjee, inflationary pressures are expected to remain elevated through the first half of the financial year, with little relief in both the first and second quarters, as raw material costs continue to stay over 25% higher compared to March exit price levels.
Meanwhile CEAT CEO expects demand to see some moderation in the second quarter, which is typically weaker amid monsoon season. However, overall demand remains robust.
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