CEAT Board Approves Rs 450 Crore Expansion to Boost PCUV Tyre Capacity at Chennai Plant

The Board of Directors of  CEAT Ltd, an RPG Group company and one of India’s leading tyre manufacturers, on Thursday unanimously approved a proposed capital expenditure of approximately Rs. 450 Crores for its Chennai Plant located at Kancheepuram in Tamil Nadu. This substantial investment aims to increase the plant's Passenger Car and Utility Vehicle (PCUV) tyre capacity by about 35% of its current capacity.

The decision comes as CEAT expects a good growth in medium term in PCUV category. "This investment is intended to add capacity progressively, to service the anticipated future demand" the company stated in an regulatory filing.

The company's Chennai plant currently operates with an annual capacity of approximately 70 lakh tyres and is utilizing about 80% of this capacity. The expansion is expected to be completed by the end of FY 2027. Funding for this significant capital expenditure will come from a mix of internal accruals and debt.

The development comes as CEAT is expecting double digit growth in FY26 and has earmarked capital expenditure in the range of Rs 900-1,000 crore, primarily for expanding its capacities in passenger car tyres and truck/bus radial tyres segment. The company had spent around Rs 946 crore during the previous fiscal.

The India tyre market size reached 202.2 million units in 2024, as per a research report by IMARC. Looking forward, it  expects the market to reach 263.8 million units by 2033, exhibiting a growth rate (CAGR) of 2.85% during 2025-2033. The market is growing steadily, driven by increasing vehicle production and rising demand for replacement tires.

CEAT reported a net profit of Rs 112.3 crore for the first quarter of FY26, registering a 27.2% decline from Rs 154.2 crore in Q1 FY25. Despite the dip in profitability, the company posted a 10.5% year-on-year increase in consolidated revenue, which rose to Rs 3,529.4 crore for the quarter ended 30 June 2025. EBITDA margin came in at 10.9%.

On a standalone basis, CEAT reported a net profit of Rs 135.4 crore in Q1 FY26, a decline of 9.2% from Rs 149.2 crore in the same quarter last year. Revenue rose 11.1% year-on-year to ₹3,520.7 crore. Reported EBITDA margin was 11.1%.