Tyre maker CEAT Ltd on Thursday reported a 27.16% decline in consolidated net profit to ₹112.3 crore in the June quarter, impacted by higher raw material cost.
The company, which had posted a consolidated net profit of ₹154.18 crore in the first quarter last fiscal, said it will invest about ₹450 crore in the capacity expansion of its Chennai plant.
Consolidated revenue from operations stood at ₹3,529.41 crore in the first quarter as against ₹3,192.82 crore in the year-ago period, CEAT Ltd said in a regulatory filing.
Total expenses in the quarter under review were higher at ₹3,375.1 crore compared with ₹3,003.56 crore in the year-ago period, it added.
Cost of materials consumed was higher at ₹2,238.76 crore over ₹1,910.81 crore in the same period a year ago, the company said.
In an investor presentation, the company said, "On YoY (Year-on-Year) basis, EBITDA (earnings before interest, tax, depreciation and amortisation) margin contracted due to an increase in the RM (raw material) basket over last year." CEAT Ltd MD & CEO Arnab Banerjee said, "We continue to grow at a strong pace with double-digit growth in top-line, driven by OEM (original equipment manufacturers) and replacement segments." Looking ahead, he said, "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." The company said its board has approved reappointment of Banerjee as Managing Director and Chief Executive Officer for a further term of two years, effective April 1, 2026, subject to approval of shareholders.
On the Chennai plant capacity expansion, the company said it currently has about 70 lakh tyres per annum with about 80% utilisation.
It plans to add "about 35% of the current capacity PCUV (passenger cars and utility vehicles)" at the Chennai plant, the company said.
The investment required is about ₹450 crore, and the proposed capacity addition is expected by the end of FY27. This investment will be funded by way of a mix of internal accruals and debt, it added.
CEAT said good growth is expected in the medium term in the PCUV category, and the fresh investment is intended to add capacity progressively to service the anticipated future demand.
