Ceat (500878) Q3 25/26 earnings summary

Executive summary

• Consolidated revenue for Q3 FY25-26 reached Rs. 4,157 crore, up 26% year-over-year, with strong volume growth across all segments and EBITDA margin at 13.66%-14.08%.

• Standalone revenue grew 20.1% year-over-year to Rs. 3,957 crore, with standalone EBITDA margin at 14.08%.

• Net profit (PAT) for Q3 FY25-26 stood at Rs. 155.4 crore, up 60.2% year-over-year.

• Growth was supported by improved domestic sentiment post-GST rate reduction and expanding international business.

• Camso integration is progressing, with transition costs impacting Q3 but expected to normalize from Q4.

Financial highlights

• Consolidated EBITDA for Q3 FY25-26 reached Rs. 568 crore, margin at 13.66%-14.08%, up 364 bps year-over-year.

• Standalone net profit at Rs. 191.6 crore, impacted by a provision for new Labour Codes.

• Gross margin for Q3 FY25-26 was 39.9%, contracting sequentially but expanding year-over-year.

• Finance cost increased 20.7% QoQ and 39.8% YoY to Rs. 105 crore.

• Earnings per share (consolidated) for the quarter was Rs. 38.59, up from Rs. 24.01 in Q3 FY24.

Outlook and guidance

• Management expects positive momentum to continue, with strong replacement demand and high single-digit growth anticipated in FY2027.

• Camso margins to normalize to double digits from Q4, with further improvement as transition completes over next 3-5 quarters.

• CapEx guidance for FY2026 at Rs. 1,000 crore, with future annual CapEx likely to rise to Rs. 1,100-1,200 crore.

• Growth in the PCUV category is expected, with capacity expansion planned.

• Expecting 1%-1.5% margin headwind in Q4 due to currency depreciation and higher natural rubber prices.