CEAT Q1: consolidated PAT crashes to ₹4 Cr as RM inflation guts margins; revenue up 22%
PAT -96.44% YoY · revenue +22.35% · margins compressing
₹4,318 Cr
+22.35% YoY
₹4 Cr
-96.44% YoY
0.09%
-3.1pp YoY
₹1.07
CEAT's June-quarter (Q1 FY27) print is a textbook margin-collapse: consolidated revenue rose 22.4% YoY to ₹4,318 Cr on healthy demand and high-capacity utilisation, but consolidated net profit attributable to owners cratered 96% YoY to just ₹4 Cr (from ₹112 Cr) and 98% QoQ (from ₹244 Cr). Net profit margin fell to 0.09% from 3.18% a year ago and 5.78% last quarter, while operating margin compressed to 8.56% (vs 10.94% YoY, 14.18% QoQ). The squeeze sits almost entirely on the cost-of-materials line — consolidated raw-material consumption jumped to ₹2,978 Cr on the 15-20% commodity cost spike management had flagged.
Q1 FY-2027 vs prior quarters
Management's own framing matches the print: MD Arnab Banerjee called Q1 "a challenging quarter," pinning the hit on West Asia-driven raw-material inflation, and CFO Kumar Subbiah confirmed only ~5% cumulative price hikes have been taken so far — below the "up to 10%" staggered increases guided on the Q4 concall — with RM costs expected to stay inflated into Q2. So this quarter validates, rather than contradicts, the cautiously-optimistic near-term guidance: the margin pain was pre-warned, though the depth of the consolidated bottom-line collapse is worse than the standalone caution implied.
The stock went into the print at ₹3,829.6, up 11.8% over the past month of trading.
For context: revenue is at a 6-quarter high.
Management guides for supportive but moderating demand in FY'27, facing significant near-term margin pressure from a 15-20% raw material cost spike in Q1. To counter this, the company is implementing staggered price hikes of up to 10% and will prudently manage capex of INR 1,300-1,400 crores. The long-term strategy rem
— This quarter: met
The headline consolidated number overstates the operating damage: standalone PAT was ₹98 Cr (down a milder 27% YoY from ₹135 Cr, NPM 2.36%), meaning roughly ₹94 Cr of the consolidated shortfall comes from below the parent. Four unreviewed subsidiaries booked a combined ₹79 Cr net loss — largely the CAMSO/OHT business consolidated from Sep 2025 (₹274 Cr equity + ₹719 Cr loan already remitted) and still pre-scale — and a ₹48 Cr forex loss was reclassified to finance costs at OHT Lanka. Readers will see two very different profit figures; the consolidated ₹4 Cr is the group truth, the ₹98 Cr standalone the India tyre core.
What to watch
W1
Pace of price hikes vs the ~5% taken so far — whether the balance of the guided 10% lands in Q2 to rebuild the 8.56% OPM
W2
RM cost trajectory: management expects commodity costs to stay inflated in Q2; watch cost-of-materials as % of revenue (currently ₹2,978 Cr)
W3
CAMSO/OHT subsidiary losses (₹79 Cr this quarter) — CEAT guided revenue benefits in H2 FY27 and margin expansion in FY28; watch the standalone-to-consolidated PAT gap narrow
W4
₹1,205 Cr new capex plus ₹1,300-1,400 Cr FY27 envelope against rising debt (net worth ₹4,991 Cr, D/E 0.65x)
Clean digital filing. Consolidated: PBT ₹32 Cr is 'profit before share of JV and tax'; after tax ₹33 Cr it is −₹1 Cr, +₹5 Cr JV share = ₹4 Cr PAT attributable to owners (non-controlling interest ~₹0). Exceptional items ₹7 Cr (VRS) both periods small. Consol PAT hit hard by subsidiary losses — 4 unreviewed subs posted ₹79 Cr net loss (CAMSO/OHT integration) and note 8 reclassed a ₹48 Cr FX loss to finance costs at a subsidiary. Standalone (₹98 Cr PAT) diverges sharply from consolidated (₹4 Cr).
Informational and educational content only. Not investment advice.