CEAT Tyres Price Hike: Rubber Costs Force Another Increase

CEAT plans another price hike in September as natural rubber prices reached a 20-year high in India. Chief Financial Officer Kumar Subbaiah confirmed this upcoming adjustment, with rubber currently trading between Rs 275 and Rs 280 per kg.

The tyre manufacturer aims for a further 1.5% to 2% increase this month. This adjustment is primarily designed to largely recover the escalating raw material costs that have persistently impacted its operational margins.

Previous Price Adjustments

This impending hike follows a series of significant price increases already implemented during the first half of the current fiscal year. These measures underscore the continuous pressure from commodity markets on production expenses.

• Average hike in the replacement segment in Q1: 5.5%
• July price increase across various products: 5.6%
• Late August price increase: 2%

Segment-Specific Performance

Different business segments have also seen notable price realisations, contributing to CEAT’s overall strategy to manage input costs. The OEM segment, for instance, experienced a substantial improvement from July 1.

• OEM segment price realization improvement from July 1: 10-11%
• International business increase in Q1: 5%
• Targeted international business increase in the current quarter: 3%

Demand and Expansion Outlook

Demand has remained exceptionally strong for eight to ten consecutive quarters, with particular robustness observed within the OEM and international segments. This sustained market appetite signals healthy underlying business conditions.

High capacity utilization, standing at 90-95% across passenger car, two-wheeler, and truck-and-bus radial categories, is now prompting further capital expenditure. This strategic investment targets expansion initiatives to effectively meet the sustained and growing market needs.