Shares of CEAT were trading higher on Tuesday, January 20, after the tyre maker reported strong volume-led revenue growth for the December quarter and outlined a stable outlook for the March quarter despite expected margin pressures.
CEAT shares were up 1.20% at Rs 3,928 on the BSE in early trade, reflecting a positive market reaction to the company’s quarterly performance update and forward commentary.
CEAT Ltd reported a 20% year-on-year increase in standalone revenue in the December quarter, driven largely by volume growth across segments. Export performance improved on a low base, while original equipment manufacturer volumes rose across two-wheelers and passenger vehicles. The replacement segment also recorded mid-teen growth during the quarter.
The company highlighted that a key demand trigger was the GST rate cut implemented in September, which led to tyre prices in the replacement market declining by nearly 10%. This price correction helped revive demand momentum during the December quarter.
Looking ahead, CEAT expects the March quarter to remain stable with double-digit year-on-year growth. However, the company indicated that margins may see some moderation in Q4 as raw material costs rise. According to management, raw material prices are expected to be higher by around 1–1.5% in Q4 compared to Q3, mainly due to higher natural rubber prices and currency volatility.
International natural rubber prices have increased from around $1,700 per tonne to nearly $1,800 per tonne, while the rupee has depreciated by 4–5% in recent months, impacting import-linked costs. Despite this, CEAT stated it does not expect sharp volatility unless there is a significant currency movement.
On the demand outlook, the company remains cautiously optimistic, with continued traction expected in two-wheeler tyres, followed by passenger vehicles, while truck and bus tyre demand typically picks up during the summer months. Exports rose over 25% year-on-year after a flat performance last year, with Europe remaining the largest market. The company’s exposure to the US stands at under 4% of total exports.
CEAT also said its board has approved additional investments at the Chennai plant for passenger vehicle tyres, while the Nagpur facility will scale up two-wheeler tyre capacity. The company has grown around 15.4% on a standalone basis in the first nine months of the fiscal and expects Q4 to remain stable with double-digit growth.
