Ceat (500878) Q3 25/26 earnings summary

Executive summary

• Consolidated revenue for Q3 FY25-26 reached Rs. 4,157 crore, up 26% year-over-year, with strong volume growth across all segments and EBITDA margin at 13.7%.

• Standalone revenue grew 20.1% year-over-year to Rs. 3,957 crore, with EBITDA margin at 14.08%.

• Net profit for Q3 stood at Rs. 155 crore, up 60% year-over-year, but down sequentially due to a provision for new labour codes.

• Replacement, OEM, and international businesses all posted robust growth, with replacement segment benefiting from GST rate reduction and channel restocking.

• Board approved Rs. 1,314 crore CapEx for Chennai plant to add 3.5 million passenger car tire capacity by H2 FY2028.

Financial highlights

• Consolidated EBITDA for Q3 at Rs. 568 crore (13.7% margin), up 317 basis points year-over-year.

• Standalone net profit at Rs. 191.6 crore, up from Rs. 95.97 crore last year, but slightly lower sequentially due to Rs. 57.81 crore provision for new labour codes.

• Gross margin for Q3 was 39.9%, down 109 basis points sequentially but up 310 basis points year-over-year.

• Finance cost increased by Rs. 18 crore due to higher average debt; total finance cost at Rs. 105 crore.

• CapEx outflow for Q3 was Rs. 254 crore; cumulative spend at Rs. 673 crore YTD, excluding Camso intangibles.

Outlook and guidance

• Management expects positive momentum to continue, with margin headwinds of 1%-1.5% in Q4 due to currency depreciation and higher natural rubber prices.

• Replacement segment expected to sustain high single-digit growth into FY2027.

• Camso margins to normalize to double digits from Q4, with further improvement as transition completes over next 3-5 quarters.

• CapEx guidance for FY2026 remains at Rs. 1,000 crore, with future annual CapEx likely to rise to Rs. 1,100-1,200 crore.

• Growth in the PCUV category is expected, with capacity expansion planned to meet future demand.