Expect Strong Double-Digit Growth in FY27, Bullish on Domestic Demand: CEAT MD & CEO Arnab Banerjee

Tyre maker CEAT Ltd expects strong double-digit growth in FY27, riding on bullish domestic demand post GST cut and robust international business despite disruptions from the war in West Asia, according to its MD & CEO Arnab Banerjee.

The company, which has announced a ₹1,205 crore investment towards capacity expansion, also expects the availability of more capacity to help drive growth, Banerjee told PTI.

"We expect a strong double-digit growth, overall in FY27," he said when asked about the outlook for FY27.

On a consolidated basis, CEAT Ltd had posted a 22% year-on-year revenue growth of ₹4,318 crore in the first quarter of the ongoing fiscal.

Banerjee further said, "We are very bullish on overall market expansion post GST cut. Rural markets are doing very well. Our Q1 top line growth was good." Stating that some more capacities are coming on stream, Banerjee said, "We expect robust growth to continue." CEAT had announced a capex of ₹1,205 crore, primarily to expand production capacity for two-wheeler tyres at its Nagpur plant, which is nearing full utilisation of existing capacity of 80,000 tyres per day. It plans to add about 53,000 tyres per day through the investment.

Banerjee, however, said the growth rate could "moderate" a bit going forward due to the price hikes that the company has undertaken to partially offset the rise in commodity costs and as further price hikes are expected.

"It (growth) will moderate a little as the price increases happen, but we expect margins to be better in the second half," he added.

Raw material cost is likely to keep going up in the second quarter also, he said, adding, "the best case scenario is that it can stabilise, but the average will be higher than the average of quarter one. So we would need further price increases (of our tyres)." Asked if the company is also looking for double-digit growth in exports too, he said, "Yes. Definitely we will look at strong growth in our international business as well this year." Exports are very dynamic, he said, adding, "We have a very good order base; we have about 60 days of order base, which is good. Price increases are happening in phases in exports." The company has got strong orders from different parts of the world in passenger car tyres, off-highway tyres and trucks and bus tyres, Banerjee said, adding the West Asia market, which accounts for about 12-13% of the company's international sales, is disturbed and "it is on and off".