Ceat (500878) Q3 24/25 earnings summary

Executive summary

• Q3 FY25 revenue grew 11.6% YoY to INR 3,299.9 crores, with strong volume growth in international and replacement segments, but standalone and consolidated net profit fell to INR 96 crores and INR 97 crores, respectively, due to margin pressures and higher finance costs.

• EBITDA margin declined to 10.5%, down 387 bps YoY, impacted by higher raw material costs.

• High capacity utilization across plants, with Halol at 95% and Nagpur two-wheeler plant at 90%.

• Camso acquisition agreement signed for $225 million, expected to close in Q1 FY26, with no impact on FY25 results and pending regulatory approvals.

• Board approved major capex for Nagpur plant expansion by 30% with an investment of INR 400 crores by FY2027-28.

Financial highlights

• Consolidated revenue for Q3 was INR 3,299.9 crores, up 11.4% YoY; EBITDA was INR 346.3 crores (10.5% margin), down 18.6% YoY; PAT was INR 97 crores, down 46.5% YoY.

• Gross margin contracted by 450 bps YoY to 36.8%.

• Working capital reduced by INR 84 crores during the quarter, aiding debt reduction.

• Debt-to-EBITDA at 1.22; debt-to-equity at 0.43; average cost of debt around 8%.

• Capex for the quarter was approximately INR 280 crores, funded through internal accruals.

Outlook and guidance

• Q4 outlook is for further acceleration in growth, with raw material costs expected to be flat to up 1%.

• Double-digit export growth expected to continue, with margin accretive international business.

• CapEx guidance for FY25 maintained at INR 1,050 crores; similar bite-sized CapEx expected for next year.

• Camso integration to raise international business saliency to 26% in FY26.

• Capacity expansion at Nagpur plant targets anticipated growth in the Indian 2/3-wheeler tyre market.