CEAT shares crash 9% after Q1 net profit tumbles 96% YoY to Rs 4 crore. What lies ahead?

Shares of CEAT sharply plunged more than 9% on Friday after the tyre-maker reported a whopping 96% year-on-year (YoY) decline in its consolidated net profit to Rs 4 crore for the April-June quarter of FY27.

The shares of the company plunged to Rs 3,471.10 apiece on NSE on Friday. If the stock manages to hold on to the sharp losses, then today’s plunge would mark the biggest single-day fall since the infamous COVID-19 crash of 2020.

CEAT Q1 earnings

CEAT on Thursday reported the sharp plunge in net profit from the Rs 112 crore reported in the same period of the previous financial year, as higher raw material costs weighed on profitability. The tyre-maker’s revenue from operations meanwhile grew 22% YoY to Rs 4,318 crore in Q1 FY27 from Rs 3,534 crore in Q1 FY26.

“Q1 was a challenging quarter for the industry. The continuing West Asia crisis led to significant raw material cost inflation, which weighed on our gross and operating margins. We responded with calibrated price increases to partly offset the impact, while staying focused on demand and market share,” said CEAT MD and CEO Arnab Banerjee.

He noted that despite the pressures, the tyre-maker delivered strong double-digit revenue growth of 22% year-on-year, supported by healthy demand across segments and high-capacity utilisation. “As we enter Q2, we will continue to take disciplined approach to pricing while staying focused on profitable growth,” he added.

Also Read | CEAT Q1 net profit drops 96% to ₹4 crore

CEAT’s board also approved a Rs 1,205 crore investment towards expanding manufacturing capacity in the two-wheeler tyre segment. CEAT CFO Kumar Subbiah said commodity cost inflation due to the West Asia War had a significant impact on the firm’s raw material costs, leading to drop in Q1 margins. “We have taken cumulative price increases of 5%. We expect raw material costs likely to remain at an inflated level in Q2 and hence, we will continue to balance our pricing actions and cost prudence to progressively mitigate the impact on our margins,” he added.

Motilal Oswal on CEAT share price
Motilal Oswal Financial Services highlighted that CEAT’s Q1 earnings print were far below its expectations due to significantly higher-than-expected interest costs, despite margins coming in-line with our expectations.

Net sales however grew over 22%, beating its estimates, helped by healthy YoY volume growth across segments. International business continues to recover well and was the fastest-growing segment YoY, the domestic brokerage added.

The domestic brokerage has a ‘Buy’ call on the shares of CEAT. “The stock currently trades at 25.2x/16.3x FY27E/FY28E P/E,” it said.

CEAT share price
CEAT shares have fallen around 10% in one month and are down 6% in 2026 so far. In the longer term, the shares of the company have delivered a negative return of 8% in one year, but gained 45% in three years and 145% in five years.

The company currently has a market capitalisation of nearly Rs 14,346 crore. The stock’s P/E ratio stands at 27x.

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