Ceat profits drop despite higher sales, volumes

Mumbai, India – Ceat Ltd has seen its fourth quarter earnings (EBITDA) fall due mainly to higher raw materials costs and despite higher sales.

The Indian group posted consolidated earnings of INR 3.9 billion (€40 million), down 1.8% compared to INR4 billion reported last year.

Sales for the three months ended 31 March rose 14.3% year-on-year to INR 34.2 billion, helped by a “combination of both volume and price growth.”

Operating margins improved in the fourth quarter by over 120 bps sequentially to 11.5% but was down 189bps compared to the last quarter of 2024, due to high cost of raw materials.

The quarter-on-quarter improvment was largely driven by “favourable revenue mix and result of strong cost controls across the value chain.”

The tire manufacturer expects to improve gross margin from 37.5% currently to above 40% in the financial year started 1 April, driven by reduced raw material costs.

Furthermore, the recent acquisition of Camso off-highway tire and rubber track maker is expected to help margin and earnings development this year.

During the quarter, volumes grew 11% year-on-year, with the replacement market seeing a “high single-digit” increase compared to the year before.

OEM demand was stronger, with a ‘mid-20%’ increase in volumes compared to last year.

Despite the growth, Ceat noted a slight decrease in its international business, due largely to “ongoing global uncertainties, tariff and non-tariff barriers.”

In the commercial vehicles market, Ceat said it was “in negative territory” but said it expected ‘single digit’ growth with OEM recovery.

On off-highway tires (OHT) segment, the Indian group said it has been facing headwinds for the past two years, primarily from the OEM segments.

According to CEO and managing director Arnab Banerjee, the OEM demand is showing “signs of revival, but it's not yet in.”

While the headwinds are “still there”, the Indian company will rely on growth through aftermarket for some more time, Banerjee added.

“We are definitely planning a growth in Europe, [while] in Latin America, things have to turn around,” said the company leader.