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Tyre major CEAT reported muted performance in Q1FY27

ICICIdirect Research 17 Jul 2026 DISCLAIMER

News: Tyre major CEAT reported muted performance in Q1FY27. Standalone net sales for the quarter came in at ₹ 4,163 crore (up 18% YoY and 3% QoQ). Gross margins for the quarter were down by ~625 bps QoQ to ~33.4% while EBITDA for the quarter stood at ₹ 380 crore with EBITDA margins at 9.1%, down ~540 bps QoQ. PAT for the quarter stood at ₹ 98 crore. 

View: Nosedive in gross margins came in as expected amidst inflated commodity prices. CEAT indicated raw material inflation rose 20%+ in Q1. Brent crude had reportedly surged from around $65 earlier in Q4 to above $100, while natural rubber rose from roughly ₹190/kg to ₹250/kg in India due to global pricing, import parity linkage and rupee depreciation. CEAT have taken cumulative price increases of 5% and expect raw material costs to remain at inflated level in Q2 and hence, will continue to balance pricing actions and cost prudence to progressively mitigate the impact on margins. Sensing healthy demand prospects domestically, the company also announced capacity addition in the 2W domain of 53,000 tyres per day at cost of ₹1,205 cores, to be commissioned by end of FY31. Current capacity stands at 80,000 tyres per day. 

Impact: Negative

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