CEAT Ltd plans to invest around ₹1,350-1,400 crore in India in FY27, nearly 25% higher than the ₹1,076 crore capex incurred in FY26, as the tyremaker looks to add capacity amid high utilisation levels and sustained demand across segments.

However, the company will remain cautious in the first quarter due to the current uncertain operating environment and sharp raw material inflation. “Looking at the current situation in quarter one, we are going with absolutely mandatory CapEx, about maybe 200 to 250 crores. For our growth CapEx plus our normal CapEx, we need about 1300 to 1400 crores CapEx during the year. We'll calibrate our approach as we go along quarter to quarter,” Arnab Banerjee, MD & CEO, CEAT Ltd, said during the company’s Q4FY26 analyst call.

CEAT management said the investment will be used to create capacity in line with demand. The company capacity utilisation levels are above 90%, said Chief Financial Officer Kumar Subbiah.

CEAT had stepped up capex in the fourth quarter of FY26 to ₹407 crore, compared with the normal quarterly run-rate of around ₹200-250 crore in the earlier quarters. Subbiah said the higher spend was to ensure that capacity additions are aligned with demand in the current year. 

CEAT is also investing in Camso operations. Banerjee said the company is working on creating an upstream facility, which is expected to be ready by March next year. The capex for this facility is estimated at around $30 million, with nearly three-fourths of the cash outflow expected during the current year.

Subbiah said CEAT’s balance sheet remains strong enough to support growth capex. Consolidated debt stood at ₹3,011 crore at the end of Q4FY26, while standalone debt stood at ₹2,961 crore, broadly similar to the level at the end of the previous quarter. The company’s consolidated debt-to-EBITDA ratio improved to 1.46x from 1.58x in Q3FY26, while debt-to-equity stood at 0.60x. “Our balance sheet is strong enough to provide and continue to provide growth capital to the business,” Subbiah said.

The capex plan comes at a time when CEAT is facing a sharp rise in raw material costs. The company has said raw material prices are expected to increase by more than 15% in Q1FY27 and could move closer to 20% by the end of the quarter. CEAT plans to manage the pressure through price increases and cost management.

Despite near-term inflationary pressures, the company expects demand fundamentals to remain supportive. Banerjee said FY26 was a strong year for both growth and profitability, and the company will continue to invest in capacity while calibrating spending based on market conditions.