Shares of tyre manufacturer CEAT plunged more than 9% in early trading on Friday following a significant decrease in net profit during the June quarter earnings. The company faced a sharp decline in consolidated net profit by 96% year-on-year to Rs 4 crore in the first quarter of FY27, down from Rs 112 crore in the same period last year. Despite this, revenue from operations saw a healthy growth of 22.4% to Rs 4,318 crore from Rs 3,529 crore, indicating strong demand across business segments.
The decline in profitability was attributed to increased raw material costs, influenced by the ongoing conflict in West Asia. CEAT’s Managing Director and CEO, Arnab Banerjee, mentioned that the company had raised tyre prices gradually to counter the surge in input costs while sustaining demand and market share. He also noted that raw material prices are expected to remain high in the upcoming quarter.
CEAT’s operational performance faced pressure, with EBITDA dropping by 5.7% to Rs 365 crore from Rs 387 crore a year ago, leading to a contraction in EBITDA margin to 8.5% from 11%. Over the past year, CEAT shares have declined by approximately 8%, performing below the broader market. The stock has witnessed a decrease of more than 8% in the last six months and nearly 6% year-to-date.
The stock’s trading range over the past year has been between a 52-week high of Rs 4,431.60 and a low of Rs 3,006.50 on the BSE.
