CEAT — Q4 FY26 earnings call

Call held 29 Apr 2026

Management summary

CEAT Limited reported a strong Q4 and FY26, with standalone revenue growing 18.2% YoY in Q4 and 15.5% for the full year, crossing ₹15,000 crores. Full-year standalone EBITDA improved by 214 basis points to ₹2,042 crores. However, the company anticipates a steep 15-20% increase in raw material costs in Q1 FY27, necessitating price hikes and leading to a moderated demand outlook due to geopolitical uncertainties and fuel prices. The CAMSO integration is progressing, with full value chain control expected by end of FY27.

Highlights

  • Standalone revenue grew 18.2% YoY in Q4 FY26 to ₹4,036 crores.

  • Full-year standalone revenue grew 15.5% to ₹15,215 crores, crossing ₹15,000 crores.

  • Full-year standalone EBITDA improved by 214 bps to ₹2,042 crores.

  • International Business saliency improved from 19% to 20.4% in Q4.

  • Dividend of 350% (₹35 per share) recommended for FY26.

Concerns

  • Raw material prices expected to increase by 15% in Q1 FY27, potentially reaching 20% by end of Q1.

  • Near-term demand outlook expected to moderate due to West Asia conflict and related fuel price expectations.

  • CAMSO business remains in a transition phase, with full value chain control expected by end of FY27 and sales ramp-up in H2 FY27.

Key financials

2 periods

Headline

  • Standalone Revenue (FY)
    ₹15,215 Cr
    YoY +15.5%
  • Consolidated Revenue (FY)
    ₹15,678 Cr
  • Standalone EBITDA (FY)
    ₹2,042 Cr
  • Consolidated EBITDA (FY)
    ₹2,063 Cr
  • Consolidated EBITDA Margin (FY)
    13.2%
  • Standalone Net Profit (FY)
    ₹812.72 Cr
  • Standalone EPS (FY)
    ₹201.17
  • Consolidated Net Profit (FY)
    ₹697.24 Cr
  • Consolidated EPS (FY)
    ₹172.78

Q4

  • Standalone Revenue
    ₹4,036 Cr
    YoY +18%
  • Consolidated Revenue
    ₹4,219 Cr
  • Standalone EBITDA
    ₹587 Cr
  • Consolidated EBITDA
    ₹598 Cr
  • Consolidated EBITDA Margin
    14.2%
  • Standalone Net Profit
    ₹283 Cr

What they filed

Q1 FY27: revenue up 22.4%, net profit down 96.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue3,305 3,300 3,421 3,529 3,773 +14%4,157 +26%4,219 +23%4,318 +22%
EBITDA362 341 388 387 503 +39%563 +65%593 +53%365 −6%
Net profit121 97 99 112 186 +53%155 +60%244 +147%4 −96%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Overall Volume Growth (Q4 YoY)
    20% Volume Growth
  • International Business Volume Growth (Q4 YoY)
    25% Volume Growth
  • Replacement Volume Growth (Q4 YoY)
    17.5% Volume Growth
  • OEM Volume Growth (Q4 YoY)
    17.5% Volume Growth

Capital allocation

high confidence
  • Capex ₹407 Cr this quarter · ₹1,350 Cr (FY27) planned
    • Capacity additions for demand (India) ₹1,350 Cr
    • CAMSO upstream equipment (mixers, calenders) $30 Mn
    Our capex was about INR1,076 crores in FY '26. The capex was higher in quarter 4, was to ensure that our capacity additions happened in line with our demand in the current year as our utilization levels are high. (Page 8) So, India overall, I'm excluding CAMSO, our capex would be about 25% more than what we had incurred last year, which is about INR1,076 crores was our last year. So it should be in the range of INR1,350 crores to INR1,400 crores for India. (Page 12) We had estimated that capex to be around $30 million approximately. And out of that, maybe three-fourths of that we would be spending in the current year in terms of cash flow, in that range.
  • Debt 1.5× EBITDA
    Our consolidated debt stood at INR3,011 crores and standalone debt stood at INR2,961 crores, very similar to the level that we were in as of the end of quarter 3. Our debt to EBITDA on a consolidated basis stands at a comfortable level of 1.46, down from about 1.58 as of quarter 3, and debt to equity is about 0.60.
  • Dividend ₹35/share (final)
    We're also pleased to inform you that our Board of Directors, in the meeting yesterday, recommended a dividend of 350% for the financial year 2025 to '26, which translates to INR35 per share.
  • Liquidity Liquidity disclosed Balance sheet is strong enough to provide and continue to provide growth capital to the business.
    Our balance sheet is strong enough to provide and continue to provide growth capital to the business.

Guidance & targets

Raw Material Cost

  • Raw material cost increase Raw Material Cost · Q1 FY27 · High confidence 15%
    So based on inventory that we are carrying and including both raw materials and finished goods, plus the raw materials that we have ordered, we feel that raw material cost increase in quarter 1 could be to the tune of 15%.

    — Kumar Subbiah

  • Raw material cost increase (replacement cost) Raw Material Cost · Q1 FY27 (current day) · Medium confidence a little higher than 15%
    But if we were to take a replacement cost of raw materials today, the number could be a little higher than 15%.

    — Kumar Subbiah

Pricing

  • Cumulative price increase (Replacement) Pricing · By June · High confidence 10%
    So, we need to take overall 10% vis-a-vis March, in replacement. Out of that, about 5% can be considered as taken already between March and April. That leaves the balance of 5%, which will be staggered through May and June.

    — Arnab Banerjee

  • Cumulative price increase (International Business) Pricing · End of Q1 FY27 · Medium confidence ~8%
    I think we have already taken 3% to 5% in international. Another 5% announcement is being made in maybe 1 or 2 weeks' time. So, it will gradually pass through over the... until the end of quarter 1, hopefully, to the extent of around 8%.

    — Arnab Banerjee

CAMSO Integration

  • Customer interface control CAMSO Integration · By September '26 (end of Q2 FY27) · High confidence ~90%
    We are planning to take over the customer interface to the extent of about 90% by September '26, which is by the end of quarter 2.

    — Arnab Banerjee

  • Full value chain control (upstream equipment) CAMSO Integration · By March '27 (end of FY27) · High confidence Complete
    this will take at least 6 quarters, 4 to 6, we have been saying, so which means we took over the business in September '25. We will be able to complete this job by March '27. So that is roughly about 6 quarters.

    — Arnab Banerjee

CAMSO Growth

  • Aftermarket growth CAMSO Growth · Second half of this financial year (H2 FY27) · Medium confidence Stabilize and grow faster
    Within aftermarket and OEM, we expect to stabilize and grow in aftermarket faster... But aftermarket should start happening in the second half of this financial year.

    — Arnab Banerjee

  • OEM growth CAMSO Growth · Maybe FY'28 · Low confidence Start coming
    In OEM, as you can understand, we'll have to do the new product development, get on to the new vehicles from the OEM. So it will be slightly later, maybe in FY '28, the growth of OEMs will start coming.

    — Arnab Banerjee

Capex

  • Capex (India, excluding CAMSO) Capex · FY27 · High confidence ₹1,350 crores to ₹1,400 crores
    So, India overall, I'm excluding CAMSO, our capex would be about 25% more than what we had incurred last year, which is about INR1,076 crores was our last year. So it should be in the range of INR1,350 crores to INR1,400 crores for India.

    — Kumar Subbiah

  • CAMSO upstream capex Capex · Current year (FY27) for three-fourths spend · High confidence $30 million approximately
    We had estimated that capex to be around $30 million approximately. And out of that, maybe three-fourths of that we would be spending in the current year in terms of cash flow, in that range.

    — Kumar Subbiah

Debt

  • Debt level Debt · Q1 FY27 · High confidence Similar to previous 3 quarters
    Considering that quarter 1 looks a little challenging with respect to cash that we will be generating and the margins standpoint, we will try to keep our debt levels, at least in the current quarter, similar to the level at which we ended in the previous 3 quarters.

    — Kumar Subbiah

Volume

  • Replacement demand MHCV Volume · Near term · High confidence High single digit
    In the near term, we expect replacement demand for MHCV to be in high single digit, arising out of increased economic activity, positive seasonality and an aging fleet.

    — Arnab Banerjee

  • Passenger car near-term growth Volume · Near term · High confidence Healthy single digit
    In passenger cars, near-term growth is expected to be healthy single digit and within passenger car, SUV/MPV categories are looking stronger than sedans per se.

    — Arnab Banerjee

  • Truck Bus Radial Replacement Demand Volume · Future (after price hikes) · Medium confidence Single digit (may fall to low single digit)
    So replacement demand will be in single digit in truck bus radial. So there will be a moderation, single digits, it may fall to low single digit also, which we are used to in truck bus radial if the 10% price hike is not adjusted in the market.

    — Arnab Banerjee

  • PCR Replacement Growth Volume · Future · Medium confidence 3-4% or 5% at best

    Previously 1-2% → 3-4% or 5% at best

    Maybe from 1% to 2%, it can go to 3% to 4%. Or 5% at best.

    — Arnab Banerjee

  • 2-Wheeler Replacement Growth Volume · FY27 · High confidence Single digit to high single digit
    but it should stay as per our expectation in single digit to high single-digit kind of growth across this year as well.

    — Arnab Banerjee

What to watch in Q1 FY27

Raw Material Cost Realization

Next quarter (Q1 FY27 results)
Current 15% expected increase in Q1 FY27
Target Actual realized increase and its impact on margins

Why it matters

This is the primary headwind for margins, and its actual impact will determine profitability.

So based on inventory that we are carrying and including both raw materials and finished goods, plus the raw materials that we have ordered, we feel that raw material cost increase in quarter 1 could be to the tune of 15%.

Risks & concerns

  • Raw Material Price Inflation

    high

    Steep raw material price hike of 15-20% expected in Q1 FY27, necessitating price increases.

    Management acknowledged

  • Geopolitical Uncertainties & Fuel Prices

    medium

    West Asia conflict and related fuel price expectations are clouding the broader demand environment and impacting Middle East sales.

    Management acknowledged

  • Demand Moderation Post Price Hikes

    medium

    Expectation of some demand moderation in Q1 FY27 as the market experiences 5-10% price hikes.

    Management acknowledged

  • CAMSO Transition Period

    medium

    CAMSO business is in a transition phase, with full value chain control and sales ramp-up expected over the next 4-6 quarters, incurring fixed costs during this period.

    Management acknowledged

  • Working Capital Increase

    low

    Increase in working capital due to accumulation of GST credit balances (₹120 crores) and higher export receivables.

    Management acknowledged

Q&A highlights

7 direct
Commodity Price Impact & Price Hikes Direct
So based on inventory that we are carrying and including both raw materials and finished goods, plus the raw materials that we have ordered, we feel that raw material cost increase in quarter 1 could be to the tune of 15%. But if we were to take a replacement cost of raw materials today, the number could be a little higher than 15%.

Directly addresses the significant raw material inflation expected in the next quarter and its potential impact on margins, indicating a challenging environment.

Asked by Siddhartha Bera

Cumulative Price Increase Strategy Direct
So, we need to take overall 10% vis-a-vis March, in replacement. Out of that, about 5% can be considered as taken already between March and April. That leaves the balance of 5%, which will be staggered through May and June.

Provides clear guidance on pricing actions in the replacement market, crucial for margin protection against rising input costs.

Asked by Siddhartha Bera

CAMSO Revenue Ramp-up & Production Levels Partial
And the front room, the activity will accelerate faster. We are planning to take over the customer interface to the extent of about 90% by September '26, which is by the end of quarter 2... But aftermarket should start happening in the second half of this financial year.

CAMSO is a significant acquisition, and clarity on its integration, revenue contribution, and margin profile is key for future growth. Management clarifies the phased approach.

Asked by Siddhartha Bera

Impact of Price Hikes on Demand Direct
However, because of the steep price increase of raw material, we have been able to pass on only half of that, right? Even that, a little bit of it is happening in the last week of April. So the full impact of price increase has not yet been experienced by the market. As it experiences 5% to 10% price hike through quarter 1, we expect some moderation of demand.

Acknowledges the potential for demand moderation due to price increases, which is a key risk to volume growth.

Asked by Rishi Vora

MRF's Pricing Actions Direct
So a couple of corrections. MRF has taken price increase in all the segments to the best of our knowledge, including 2-wheeler and passenger. They took it in a staggered manner, but it has come through.

Clarifies competitive pricing dynamics, indicating that major players are indeed taking price hikes across all segments, which supports CEAT's own pricing strategy.

Asked by Rishi Vora

CAMSO U.S. Tariffs Direct
No, it will be... the tariff will be at 10% and the metals part of tracks, which is a little metal clip that goes on the undersurface of the track, that will be tariffed at 25%... Tracks is roughly 50%.

Provides specific details on tariff impact on a key international business segment, affecting its profitability and competitiveness.

Asked by Raghunandhan

Other Income Fluctuation Direct
I wouldn't say INR62.5 crores of other income we have reported on a standalone basis is a sustainable number. I think what we had reported in the previous quarter average would be the correct representation of our other income. And last quarter had more to do with the fact that we had currency-related gains, which is taken as other income.

Clarifies that a significant portion of the other income was non-recurring (currency-related gains), providing a more realistic view of sustainable earnings.

Asked by Rishi Vora

Working Capital and Inventory Days Direct
On a standalone basis, the working capital increased by about INR108 crores as compared to quarter 3... This is mainly on account of accumulation of some GST credit balances in 2 of our states to the tune of about INR120 crores, plus an increase in receivables on exports due to longer cycle time involved in exports and increase in dues from some state governments with respect to incentives.

Explains the drivers behind the increase in working capital, including specific issues like GST credit balances and export receivables, which are important for cash flow analysis.

Asked by Vijay Pandey

3 min read 7 chapters

Detailed narrative

Strong Q4 and FY26 Financial Performance

CEAT Limited delivered a robust performance in Q4 and FY26. Standalone revenue grew 18.2% YoY in Q4 to ₹4,036 crores, and for the full year, it increased by 15.5% to ₹15,215 crores, marking the first time it crossed the ₹15,000 crore milestone. Full-year standalone EBITDA stood at ₹2,042 crores, reflecting a significant 214 basis points improvement over FY25, while consolidated EBITDA margin for Q4 was 14.2%.

Raw Material Inflation and Pricing Actions

The company anticipates a steep increase in raw material costs, with Q1 FY27 expected to see a 15% rise, potentially reaching 20% by the end of the quarter. To mitigate this, CEAT plans a cumulative 10% price increase in the replacement market by June, with 5% already implemented between March and April, and the remaining 5% staggered through May and June. International business prices are also being raised by approximately 8% by the end of Q1 FY27 to offset rising input costs.

Demand Outlook and Segment Performance

Near-term demand is expected to moderate due to geopolitical conflicts, fuel price expectations, and the impending price hikes. Despite this, MHCV replacement demand is projected to be in high single digits, and passenger car growth is expected to remain healthy single digit. 2-wheeler demand continues to be strong, with consumption levels surpassing pre-COVID levels, and is expected to maintain high single-digit growth in FY27. OEM segments, particularly MHCV and LCV, showed continued strength with robust growth in Q4.

CAMSO Integration and Transition Progress

The CAMSO business is currently in a transition phase, with full control of the value chain, including upstream equipment, expected by March 2027. The company aims to take over 90% of the customer interface by September 2026. Aftermarket sales are expected to stabilize and grow in the second half of FY27, while OEM growth is anticipated to begin in FY28, following new product development and vehicle fitments.

Capital Expenditure and Debt Management

CEAT spent ₹407 crores on capex in Q4 FY26, bringing the total for FY26 to ₹1,076 crores. For FY27, the company plans an India-specific capex of ₹1,350-1,400 crores, plus an additional $30 million for CAMSO's upstream facilities, with three-fourths of this spent in FY27. Consolidated debt stood at ₹3,011 crores, with a net debt to EBITDA ratio of 1.46 and debt to equity of 0.60, indicating a strong balance sheet capable of supporting growth.

International Business Growth and Premiumization Focus

International business saliency improved from 19% to 20.4% in Q4 on a standalone basis, and over 23% including CAMSO, highlighting its margin-attractive nature. The company launched over 130 new off-highway SKUs and established overseas entities to build a permanent localized presence. CEAT continues its focus on premiumization, with 17-inch plus passenger vehicle sales and 250cc plus 2-wheeler sales reaching new highs, and new premium products launched in truck bus radial.

Working Capital and Other Income Dynamics

Standalone working capital increased by ₹108 crores in Q4, primarily due to accumulated GST credit balances of approximately ₹120 crores in two states, and increased receivables from exports due to longer cycle times. The company is actively taking steps to return to a negative working capital position. The reported other income of ₹62.5 crores in Q4 was largely driven by non-recurring currency-related gains and is not considered a sustainable run-rate.

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