CEAT Ltd, the flagship company of RPG Enterprises, has drawn up a ₹1,314-crore expansion plan to increase the production capacity of its Chennai plant by 35 lakh tyres per annum by the first half of FY28, driven by expectations of strong growth in the passenger and utility vehicle as well as commercial vehicle segments in the short to medium term.
As per the proposal, the company plans to enhance its annual production capacity by the end of the first half of FY28. The expansion will be funded through a mix of internal accruals and debt.
Currently, CEAT has an annual production capacity of about 95 lakh tyres, with capacity utilisation at around 80%. The fresh investment will add capacity in a phased manner to cater to anticipated future demand.
In a separate regulatory filing, the tyre maker said its board has approved an investment of up to ₹3.61 crore in cash through a rights issue of its wholly owned subsidiary, Tyresnmore Online Pvt. Ltd. Following the investment, CEAT’s stake in the subsidiary will remain at 100%.
Tyresnmore is engaged in the business of selling automotive tyres and accessories, and in providing services such as installation, fitting, wheel balancing and wheel alignment. The subsidiary reported a turnover of ₹32.26 crore in FY25.
Q3 Performance
On a consolidated basis, CEAT reported revenue of ₹4,157 crore for the December quarter, marking a 26% increase over the year-ago period. Net profit rose to ₹155 crore from ₹97 crore in the corresponding quarter last year.
Commenting on the performance, Arnab Banerjee, MD & CEO of CEAT Ltd, said:
“It has been a good quarter, supported by strong revenue growth across all segments. The reduction in GST rates has improved sentiment in the domestic market, and we have also seen opportunities opening up in international markets. We expect the positive momentum to continue in the coming quarter and help us close the year on a strong note.”