Ceat expects double-digit revenue growth in fiscal 2026

Mumbai, India – Ceat Ltd expects to deliver double-digit revenue growth in its current fiscal year (started 1 April), supported by local demand from India and a recovery in Europe.

Earnings for the three months ended 30 June fell 1.7% year-on-year to INR3.86 billion (€38 million), while the earnings margin dropped to 10.9% from 11.5% a year earlier, Ceat announced 18 July.

The Indian tire maker linked the dip to “significant marketing costs associated with the Indian Premier League.”

First-quarter revenue, meanwhile, grew 10.5% year-on-year to INR35.3 billion.

According to managing director and CEO Arnab Banerjee, the sales growth was driven by both the OEM and replacement segments.

"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,” he said.

Commenting on the market development during an earnings call, Banerjee said Ceat expects double-digit growth in full-year sales, driven by the local Indian market.

According to Banerjee, key themes that are playing out include the development of EV-specific tires with low noise and rolling resistance, IoT-enabled tires, and puncture-proof designs.

Furtermore, local manufacturing capacity expansion and a shift towards premium tires are “reshaping the market structure across categories and fuelling investments.” 

With these strong drivers in place, Banerjee said, “the Indian tire market is expected to grow at a strong single-digit CAGR till 2031, with a significant growth trajectory for the industry demand outlook.”

However, the Ceat leader cautioned about geopolitical tensions and “potential spillover” from US tariff uncertainty, adding that they might lead to challenges in supply chain management as well as lower consumer sentiment across the globe.

On Ceat’s first-quarter performance, the company leader said overall capacity utilisation was above 80%.

“Expansion projects are progressing as per plans, and we expect our total capex for next year, as guided, to be around INR10 billion," he said.

The figure will also include the maintenance capex of Ceat and Camso. 

The projects will mainly aim to expand manufacturing capacity across key product segments, including truck and bus radials, OTR, and two-wheeler tires.

The capex will maily support previously announced projects, including an ongoing capacity expansion at the company’s Ambarnath, Mumbai factory, where Ceat is increasing output from 105 tonnes per day to 150 tonnes per day.

As for the near-term demand outlook, Ceat said it expected replacement demand for commercial MHCV tires to be "around the mid-single digits."

Replacement demand for two-wheelers is projected to be “high single digits”, while there is “some concern” in the replacement passenger car tire market, where growth could be in the low single digits.

In OEM, low single-digit growth is expected in the passenger segment, and growth rates are “weakening” in two-wheelers, particularly motorcycles.

Internationally, Banerjee said the company was “seeing gradual demand improvement in agriculture radials and off-road tires (OTRs) in global OEMs.”

Furthermore, the group expects seasonal demand from Europe for passenger car tires in its second quarter.

“And should the tariff situation stabilise, we may expect to see a ramp-up of operations in the US. Channel destocking may pause, leading to better sentiment in the second quarter.”