CEATLTD

CEAT Ltd shares tumbled more than 7% in early trade on Friday after the tyre maker reported a sharp decline in June-quarter earnings, as rising raw material costs weighed heavily on profitability despite strong revenue growth. Investors largely shrugged off the company's Rs 1,205 crore capacity expansion plan, focusing instead on the steep margin compression. The stock was trading at Rs 3,545, down 7.43%, after falling as much as 9.4% during the session. CEAT was among the top losers on the BSE. Despite the sharp intraday decline, the stock has fallen 6.1% so far in 2026, compared with a 7.2% decline in the Nifty 50. The company currently commands a market capitalisation of over Rs 14,350 crore. For the April-June quarter, CEAT reported a consolidated net profit of Rs 4 crore, a 96.4% decline from Rs 112 crore in the corresponding period last year, as elevated raw material costs significantly eroded margins. Revenue from operations rose 22.4% year-on-year to Rs 4,318 crore from Rs 3,529 crore, reflecting healthy demand across its businesses. However, operating performance weakened, with EBITDA falling 5.7% year-on-year to Rs 365 crore. EBITDA margin narrowed sharply to 8.5% from 11% a year earlier, highlighting the impact of higher input costs. Despite the near-term pressure on earnings, CEAT unveiled a major investment to support its long-term growth strategy. The board approved a capital expenditure of Rs 1,205 crore to expand manufacturing capacity at its Nagpur facility, underscoring the company's focus on meeting future demand.