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.