Tyre maker Ceat is expanding capacity at all its plants to meet the surge in demand for tyres across categories following the cut in goods and services tax (GST) rates helping consumers have greater disposal incomes.
GST on tyres have been reduced to 18% and 5% on pneumatic tyres and tractor tyres, respectively from September 22. The industry witnessed a sharp reduction in raw material prices during the September quarter.
Speaking to FE, Arnab Banerjee, managing director and CEO, Ceat said, “Raw material prices have come down by 5% as against the June quarter, which is significant. Net sales realization has gone up particularly in replacement and international segments.”
Ceat gained back some of its lost market share in the original equipment maker (OEM) segment. “It was a better quarter because we had shed some market share there in 2-3 years. We are getting back on some very premium vehicles in OEM. Aftermarket has been strong double digit too,” Banerjee added.
The December quarter raw material cost basket will be similar to September quarter or a tad down. “However, we import a lot and the rupee is depreciating. We import natural rubber, rubber chemicals and carbon black,” Banerjee added.
The Mumbai-based company had lined up a capital expenditure (capex) of Rs 1,000 crore for FY26. Though this guidance will remain intact for this year, it may nudge up by Rs 200 crore in FY27, said Banerjee.
“The margins will be moving in a small band because the turnover in Q3 will be a down quarter because of the onset of winter and demand sees a contraction in the north and east of the country. This will recover in the February-March period,” Banerjee added.
Ceat is expanding capacity at Chennai for passenger vehicles and truck bus radials, in Nagpur for two-wheelers, where there is full utilisation of capacity, in Ambernath for speciality tyres and. Its average capacity utilization stands at 85%.
Ceat on Friday announced a year-on-year 53% increase in consolidated net profit for the quarter ended September to Rs 186 crore. Its revenue from operations grew by 14% to Rs 3772 crore.
Ceat also announced the appointment of Apurva Chandra as an additional director in the capacity of non-executive independent director. Paras Chowdhary, the company’s former managing director, is also appointed as an additional director in the capacity of non-executive non-independent director.