CEAT Ltd. reported a 39.8% year-on-year decline in consolidated net profit for the September quarter, as elevated raw material costs weighed on profitability despite strong revenue growth.
The tyre maker's net profit fell to Rs 112 crore in the second quarter of the financial year 2026-27, compared with Rs 186 crore in the corresponding period last year. Revenue from operations, however, rose 26.2% to Rs 4,762 crore from Rs 3,773 crore a year earlier.
Operating performance remained under pressure, with earnings before interest, taxes, depreciation and amortisation (EBITDA) declining 9.1% year-on-year to Rs 457 crore from Rs 503 crore. EBITDA margin contracted to 9.6% from 13.3% in the year-ago quarter, highlighting the impact of higher costs on the company's earnings.
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CEAT Managing Director and Chief Executive Officer Arnab Banerjee said the company sustained double-digit revenue growth, supported by momentum in premium segments across its business units.
However, the continuing crisis in West Asia kept raw material costs elevated during the quarter, presenting challenges for the company. CEAT said it responded through tighter cost controls and disciplined execution.
Looking ahead, the company expects to sustain its growth momentum in the second half of the financial year. Banerjee said CEAT would aim to deliver double-digit growth again, alongside further price increases.
Chief Financial Officer Kumar Subbiah said commodity costs remained high because of the continuing conflict in West Asia. The company will focus on calibrated pricing actions and improving its product mix, while implementing moderate price increases.
Cost pressures are expected to persist into the December quarter as commodity prices remain elevated, Subbiah said. The company will also maintain fiscal discipline while investing to meet demand and support profitable growth.
CEAT's consolidated revenue growth comes as it continues to invest in capacity expansion. Subbiah said debt increased during the September quarter, largely due to capital expenditure of close to Rs 490 crore to expand capacities where utilisation has been high, as well as dividend payouts.
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The company's latest results underline the challenge facing its business: sustaining revenue growth while protecting margins in a high-cost environment. While demand in premium segments has supported sales, the extent to which pricing actions and product-mix improvements can offset commodity pressures will remain a key monitorable in the coming quarters.
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