CEAT’s board has approved a capital expenditure of ₹1,314 crore to expand its Chennai plant. This investment will increase the plant’s capacity by approximately 35 Lakhs Tyres per annum and is expected to be completed by the first half of FY2028. The expansion aims to meet growing demand in the PCUV (Passenger Car and Utility Vehicle) category. Funding will come from a mix of internal accruals and debt.
Chennai Plant Expansion
CEAT is set to significantly expand its Chennai plant at Kannanthangal, Maduramangalam Post, Sriperumbudur TK, Kancheepuram. This strategic move involves a capital expenditure of approximately ₹1,314 Crores. The board of directors has unanimously approved this plan during a meeting held on January 19, 2026.
Capacity and Timeline
The expansion will add approximately 35 Lacs Tyres per annum to the plant’s existing capacity. Currently, the plant has an existing capacity of about 95 Lakh Tyres per annum, with capacity utilization at around 80%. The company anticipates completing this expansion by the end of the first half of FY2028.
Financial Details and Rationale
The investment of ₹1,314 Crores will be funded through a mix of internal accruals and debt. This expansion is strategically aligned with CEAT’s expectation of strong growth in the PCUV category in the short to medium term. The increased capacity will allow CEAT to progressively service the anticipated future demand in this segment.
Q3 FY26 Financial Performance
CEAT reported a consolidated revenue of ₹4,157 crore in Q3 FY25-26, a 26% year-over-year increase. The EBITDA margin stood at 13.66%, and net profit was ₹155 crore. The standalone revenue for Q3 was ₹3,957 crore, a 20% year-over-year increase, with an EBITDA margin of 14.08% and a net profit of ₹192 crore.
Impact of New Labour Codes
The Company has recognized incremental estimated obligations aggregating ₹58 crores as a provision towards the impact of the new labour codes.
Source: BSE
