CEAT Q2 FY27 results: Profit -40%, revenue +26%

Overview: profit drops even as topline grows

CEAT Limited reported a sharp year-on-year decline in profitability for the second quarter of FY27, even as revenue rose strongly. Consolidated net profit fell 39.8% YoY to ₹112 crore for the quarter ended September 30, 2026, compared with ₹186 crore a year earlier. Revenue from operations increased 26.2% YoY to ₹4,762 crore from ₹3,773 crore. The company said its unaudited financial results were approved by the board of directors on Wednesday. The quarter also stood out for a notable sequential recovery in profit from the April-June 2026 period. Net profit improved to ₹112 crore in Q2 from ₹4 crore in Q1 FY27.

Key numbers from the September 2026 quarter

Along with revenue growth, consolidated total income increased to ₹4,767 crore in Q2 FY27 from ₹3,777 crore in Q2 FY26. Total expenses rose faster than income, climbing 29.8% YoY to ₹4,585 crore from ₹3,531 crore. Profit before exceptional items, share of joint ventures and tax declined to ₹182 crore from ₹246 crore. The company also reported exceptional expenses of ₹13 crore during the quarter, compared with nil in the year-ago period. In the standalone financial statement notes, CEAT identified voluntary retirement scheme (VRS) compensation of ₹13 crore during the September quarter. Consolidated basic earnings per share (EPS) came in at ₹27.79 versus ₹45.98 in Q2 FY26.

Q2 FY27 vs Q2 FY26: how the P&L moved

The main divergence in the quarter was between topline growth and cost growth. While revenue from operations grew 26.2% YoY, total expenses were up 29.8% YoY, which compressed profitability. The decline in profit before exceptional items, share of JVs and tax to ₹182 crore from ₹246 crore provides a view of operating pressure before one-off items. The ₹13 crore exceptional expense further impacted reported results. With basic EPS falling to ₹27.79, the quarter reflected weaker per-share earnings compared with the same period last year. The company’s limited review also adds clarity on reporting quality for investors tracking quarterly changes.

Sequential picture: profit rebounds from Q1 FY27

On a quarter-on-quarter basis, CEAT’s consolidated net profit rose sharply to ₹112 crore from ₹4 crore in the April-June 2026 quarter. The article data does not provide Q2 FY27 quarter-on-quarter revenue or margin details, but the profit move is explicitly stated. This sequential improvement is important context because Q1 FY27 had seen a very low profit base. Separately, another data point in the provided material notes that CEAT tumbled 6.95% after reporting a 96.43% YoY decline in consolidated net profit to ₹4 crore in Q1 FY27. For Q2, no stock price reaction is provided in the text.

Half-year performance: revenue up, profit down

For the six months ended September 30, 2026, CEAT reported consolidated revenue from operations of ₹9,080 crore, up 24.3% from ₹7,302 crore in the corresponding period last year. However, consolidated net profit for H1 FY27 declined 60.9% to ₹116 crore from ₹297 crore. This suggests that, despite strong sales growth across the first half, profitability was materially lower than the previous year’s first half. The article does not break down H1 margins or segment drivers, but it clearly highlights the divergence between growth and earnings.

Exceptional item and VRS cost: what is disclosed

CEAT reported exceptional expenses of ₹13 crore in Q2 FY27, versus nil in Q2 FY26. The standalone financial statement notes identified VRS compensation of ₹13 crore during the September quarter. The disclosure links a specific cost item to the period, helping investors understand the presence of exceptional charges in the reported numbers. With profit before exceptional items falling YoY, the exceptional expense is not the only factor behind the profit decline, but it is a clearly stated item in the result summary. Investors typically track such disclosures because they can affect comparability across quarters.

Earnings call and audit review status

CEAT announced it will host its Q2 FY27 earnings call on October 15, 2026, at 4:00 pm. The virtual interaction is scheduled to feature Managing Director and CEO Arnab Banerjee and CFO Kumar Subbiah. On the reporting and review side, statutory auditor B S R & Co. LLP issued an unmodified limited review conclusion on the consolidated financial results. The company described the quarterly results as unaudited for the quarter ended September 30, 2026.

Capacity and capex context mentioned alongside results

The provided material also references CEAT’s capacity and capex plans. CEAT’s board approved a capital expenditure plan for expansion of tyre manufacturing capacity, and the company has an installed capacity of about 80,000 tyres per day, excluding capacity under implementation, with utilisation at around 95%. Another disclosure in the text notes that the board, at its meeting held on July 16, 2026, approved capacity expansion with an investment of ₹1,205 crore. The plan is to add capacity of 53,000 tyres to the existing capacity of 80,000 tyres at the Nagpur manufacturing plant, which was described as nearing full utilisation. Separately, FY27 capex guidance is cited as ₹1,300-1,400 crore for capacity expansion.

Street view in the provided data: Motilal Oswal on CEAT

The material includes a broker note stating Motilal Oswal Financial Services retained a Buy rating on CEAT and expected operating performance to revive in the second half of FY27. The broker’s thesis cites healthy demand across Indian tyre segments, expected relief from easing raw-material costs, further price hikes, and improvement in Camso’s operations as CEAT completes a customer transition and gains full operational control. It also states management expected an additional 8-10% quarter-on-quarter increase in raw-material costs in the second quarter, driven by opening inventory, rubber prices and currency depreciation. The same note mentions Camso reported negative operating margins in the first quarter due to investments in European warehouses, offices, systems and hiring, with improvement expected over the next one to two quarters as the transition progresses.

Key financial snapshot table

Market impact: what the numbers imply

The reported quarter shows a clear pattern: revenue expanded strongly while costs rose faster, which lowered profits and earnings per share versus last year. Expenses growth of 29.8% outpacing revenue growth of 26.2% is directly consistent with the profit decline highlighted in the results. The sequential jump in profit from ₹4 crore in Q1 FY27 to ₹112 crore in Q2 FY27 indicates a sharp quarter-on-quarter recovery from a low base. For investors, the combination of strong topline growth, cost pressure, and exceptional expenses frames the immediate discussion points for the upcoming earnings call. The unmodified limited review conclusion from the statutory auditor adds assurance on the reported consolidated numbers as presented.

Analysis: why this quarter matters for tracking FY27

Q2 FY27 provides two reference points for CEAT’s FY27 narrative in the provided material. First, it confirms that demand or pricing supported a 26.2% increase in revenue from operations to ₹4,762 crore. Second, it highlights that profitability remains sensitive to cost movements and one-off items, as total expenses rose to ₹4,585 crore and exceptional expenses were ₹13 crore. The half-year numbers reinforce the same theme, with H1 revenue up 24.3% to ₹9,080 crore but H1 net profit down 60.9% to ₹116 crore. Separately, the broker note included in the text places attention on raw-material cost trends and the progress of Camso integration, which are cited as key factors to watch.

Conclusion: focus shifts to earnings call details

CEAT’s Q2 FY27 results show a year-on-year decline in net profit to ₹112 crore even as revenue climbed to ₹4,762 crore, with expenses rising faster than income and an exceptional expense of ₹13 crore. The company has scheduled its Q2 FY27 earnings call for October 15, 2026, at 4:00 pm with the MD and CEO and the CFO. Investors will likely look for more clarity on cost pressures, the nature of exceptional items, and execution on capacity expansion plans already approved by the board. The next set of updates will come through management commentary during the scheduled call and subsequent disclosures.