Highlights

• CEAT reported 26% YoY revenue growth to ₹4,157 crore in Q3FY26, with sequential growth of 10%.
• EBITDA margin improved to 13.7%, even as net profit declined 17% QoQ to ₹155 crore.
• Brokerages continue to maintain Buy/Add ratings with target prices above current levels.

CEAT Ltd (NSE:CEATLTD), a leading player in India’s tyre manufacturing space, has come under renewed focus after reporting its Q3FY26 financial results. While the stock has declined nearly 10% over the past month, brokerage firms have continued to maintain positive recommendations. The shares were trading at ₹3,544 on 21 January, down 4.52% intraday, even as analysts have set target prices implying upside from current levels.

Multiple brokerage firms have retained Buy or Add ratings on CEAT. Target prices range between ₹4,100 and ₹4,700, indicating upside potential from current market levels.

Notably, on a longer horizon, the stock remains up 19.73% over the past year, indicating divergent short-term and long-term price trends.

Revenue Growth Accelerates in Q3FY26

The company reported a 26% year-on-year increase in revenue for Q3FY26, rising to ₹4,157 crore from ₹3,300 crore in Q3FY25. On a sequential basis, revenue increased 10% from ₹3,773 crore in Q2FY26.

Profitability Shows Mixed Sequential Trend

Net profit for the quarter rose 60% year-on-year to ₹155 crore, compared with ₹97 crore in the corresponding quarter last year. However, on a quarter-on-quarter basis, profit declined 17% from ₹186 crore in Q2FY26. EBITDA margin improved to 13.7%, expanding 317 basis points year-on-year and 13 basis points sequentially, despite elevated raw material costs during the period.

Balance Sheet and Capital Allocation Updates

As of Q3FY26, CEAT’s debt stood at ₹2,931 crore, with leverage ratios showing sequential improvement. Capital expenditure during the quarter amounted to ₹254 crore, while working capital levels increased marginally. The company continues to balance growth investments with debt management initiatives.

Capacity Expansion and Subsidiary Investment

CEAT plans to expand its Chennai tyre manufacturing facility by adding capacity of 35 lakh tyres per annum. With current utilisation levels close to 80%, the ₹1,314 crore capex project is expected to be completed by H1 FY2028 and will be funded through internal accruals and debt.

Separately, the company has approved an investment of up to ₹361 lakh in its wholly owned subsidiary, Tyresnmore Online Private Limited, via a rights issue. The investment will maintain 100% ownership and support the expansion of its auto-ancillary services platform, which recorded a turnover of ₹3,225.73 lakh in FY25. Allotment is expected by February 2026.

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