CEAT Q2 FY27 slides: record revenue meets margin pressure

CEAT Limited's Q2 FY27 earnings report revealed record revenue of Rs. 4,762 crores, up 26.2% year-over-year. However, this strong performance was marred by margin compression, with EBITDA margins falling 403 basis points to 9.5%. The company's stock price dropped 4.52% to $3,206 after the earnings release, despite beating analyst estimates on both revenue and earnings per share.

CEAT's diversified product mix and balanced market distribution helped mitigate segment-specific demand volatility. The company's raw material cost inflation remained a persistent challenge, with projected inflation of 3% to 3.5% in Q3 FY27. CEAT's Q2 FY27 consolidated revenue reached an all-time high, driven by a 40% volume expansion and 60% from pricing actions and product mix improvements.

The presentation highlighted robust volume growth across segments, with two/three-wheelers and truck & bus segments accounting for 28% and 27% of standalone revenue respectively. Despite the strong revenue performance, profitability challenges persisted, as reflected in the year-over-year decline in consolidated profit after tax to Rs.

112 crores. The company remains committed to innovation and quality, having established strong operational credentials and operating two Lighthouse-certified factories.