CEAT Limited plans to invest INR 13-14 billion in fiscal 2027 to expand capacity and support growth, as the tyre maker rides strong momentum from a record FY26 while preparing for a near-term squeeze from raw material inflation.

The capital expenditure programme—up roughly 25 percent from the previous year—comes as capacity utilisation remains elevated at 85–90 percent across categories, necessitating incremental investments to meet demand.

Chief Executive Arnab Banerjee said the company would remain “careful” in the first quarter amid volatile input costs and macro uncertainty, before scaling up spending as conditions stabilise.

Additional investments are also being channelled into integrating the CAMSO off-highway tyre business, with about USD 30 million earmarked for upstream capabilities such as compound mixing and calendering. The integration is expected to be completed by the end of FY27, unlocking margin benefits from FY28.

Record year underpins expansion

The investment push follows a strong FY26 in which CEAT delivered double-digit growth across segments.

Standalone revenue rose 15.5 percent for the full year, while fourth-quarter revenue grew 18.2 percent, crossing INR 150 billion in annual revenue for the first time.

Growth was driven by a combination of volume expansion and pricing, aided by GST rationalisation that improved affordability and boosted demand across replacement and OEM channels.

Replacement demand remained robust, particularly in two-wheelers, while OEM growth was led by passenger vehicles and farm equipment. International operations also rebounded strongly, with high growth in Europe and the U.S.

Profitability milestones

CEAT crossed a key profitability threshold, with EBITDA exceeding INR 20 billion for the first time and margins holding at 13.4 percent for the full year.

Net profit stood at INR 8.12 billion, supported by operating leverage, cost discipline and an improved product mix.

Finance chief Kumar Subbiah said the company’s balance sheet remains “strong enough to provide growth capital”, with debt levels stable at around INR 30 billion  and leverage metrics improving.

Global expansion and premium focus

CEAT is deepening its international footprint, setting up local entities in Germany, the UK, France and Poland to strengthen distribution and customer engagement.

Exports now account for over one-fifth of standalone revenue, rising further when including CAMSO, as the company expands in higher-margin markets.

The tyre maker is also focusing on premiumisation, with increased sales of larger passenger vehicle tyres and high-performance two-wheeler tyres, alongside a growing presence in electric vehicle segments.

Digital and EV strategy

The company is investing in digital infrastructure, including a centralised data lake and AI-led analytics capabilities, aimed at improving operational efficiency and decision-making.

In electric mobility, CEAT holds about 29 percent share in passenger EV OEM tyres and 18% in electric two-wheelers, positioning itself to benefit from the sector’s growth.

Cost headwinds loom

Despite strong fundamentals, CEAT faces mounting cost pressures.

Raw material costs—linked to crude oil and natural rubber—are expected to rise sharply, with management guiding for a 15 percent increase in the first quarter of FY27.

To mitigate the impact, the company is implementing price increases of up to 10 percent in the replacement market, though pass-through in OEM and international segments will occur with a lag.

Executives cautioned that demand may moderate as higher prices take effect, particularly in price-sensitive categories such as commercial vehicles.

Outlook

CEAT expects demand to remain broadly supportive, underpinned by rural cash flows, replacement cycles and ongoing economic activity, though growth is likely to moderate from FY26 levels.

“Structural demand drivers remain in place,” Banerjee said, adding that the company is positioned to navigate near-term volatility while sustaining long-term growth.

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Balkrishna Industries (BKT) has appointed Saroj Kumar Khuntia as chief financial officer with effect from June 18, following the retirement of Madhusudan Bajaj, who stepped down after attaining the age of superannuation.

The board approved Khuntia's appointment at its meeting on June 17, based on the recommendations of the nomination and remuneration committee and the audit committee.

Bajaj ceased to serve as chief financial officer and key managerial personnel at the close of business on June 17 in accordance with the company's retirement policy.

The company said his departure was not a resignation. Following his retirement, Bajaj will continue to assist the company as special adviser to the chairman and managing director.

The board recorded its appreciation for Bajaj's contribution and leadership during his tenure.

Khuntia assumes the role of chief financial officer and key managerial personnel from June 18. He will also serve as compliance officer.

A fellow chartered accountant, Khuntia has more than 24 years of experience in corporate finance, strategy, capital markets, treasury, taxation, governance and finance transformation.

He has previously worked with CG Power, the Mahindra & Mahindra Group, IBM and Hindustan Lever.

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As cost pressures tighten across the global tyre industry, manufacturers are increasingly turning inward to extract efficiencies from processes they can control. While raw material volatility remains unavoidable, machinery performance has emerged as a decisive lever in balancing cost and quality. Companies like Comerio Ercole position themselves as critical enablers in this shift, promising precision, consistency and waste reduction. However, the extent to which advanced machinery alone can offset broader market uncertainties warrants closer scrutiny.

It is no news that the global tyre industry is looking at every angle of its procurement to supply ecosystem for being more conservative from a price point. Nonetheless, it is a prudent reality of today’s volatile global market that certain aspects within tyre manufacturing process, such as raw material prices, cannot be controlled or influenced.

Hence, manufacturers look more inwards, and that call is being addressed by the other players of the value chain such as machine manufacturers. Italian tyre machinery maker Comerio Ercole makes machines that minimise variability in production, reducing scrap and optimising material usage.

Speaking to Tyre Trends exclusively, Managing Director Riccardo Comerio said, “Our machines derive their credibility in the market because of their high precision and long-term reliability. Our machines minimise variability in production, reducing scrap and optimising material usage. Their durability also ensures lower maintenance costs and long-term investment value.”

Comerio Ercole was founded in 1885 and headquartered in Busto Arsizio, specialising in high-end machinery for the rubber, plastics and nonwovens industries with a particularly strong global reputation in calendering technology, which is one of the most critical processes in tyre manufacturing.

It operates upstream as a key technology partner, supplying advanced calender lines, mixing systems, coating and lamination equipment and turnkey plant solutions to leading tyre manufacturers worldwide, thereby acting as an enabler of tyre production.

The company combines mechanical engineering with process expertise, digital Industry 4.0 capabilities and research and development-driven innovation, including patented systems and award-winning solutions like the ZEUS calender line, while also expanding into sustainability through recycling technologies such as devulcanisation systems.

Its last notable move being a 2022 strategic stake in Sasmac International (Saspol Technology) to expand capabilities in presses and retreading systems, recent efforts have focused on digital platforms like Hercules40, continuous product innovation and global market engagement.

“The company continuously improves mechanical precision and process stability, ensuring excellent uniformity. The combination of high-quality machine construction, advanced control systems and super precise roll geometry allows for very tight tolerances and consistent output over time,” added Comerio.  

NEW REQUIREMENTS

According to Comerio, the main challenges that tyre makers face today include managing complexity, ensuring precision and consistency, reducing waste and maintaining efficiency. This makes high-performance, precise and durable machinery more important than ever.

He noted that the future of tyre making technology will focus on precision, durability and efficiency, combined with automation and sustainability. “Companies like Comerio Ercole, together with complementary partners such as Saspol, are well positioned to support the evolution of the tyre industry with very reliable, high-quality solutions,” he noted.

He added that as a global leader in calenders, open mills and internal mixers for the tyre and rubber industry, their machines are designed for high performance, extreme precision and long operational life.

To meet evolving compound requirements, Comerio Ercole focuses on robust engineering, precise control of process parameters and the ability to handle increasingly complex and high-performance rubber formulations, especially for major tyre manufacturers in markets like India.

The calenders and mills are built to process high-performance and speciality compounds with stability and accuracy. Their robust design and precision allow customers to consistently achieve the required performance standards.

Moreover, automation enhances the inherent strengths of the machines such as precision and reliability by ensuring consistent operation, reducing human error and improving overall production efficiency.

Commenting on the evolving systems to process recycled and sustainable rubber materials, Comerio said, “Processing recycled materials requires even greater control and stability. Our machines are well suited to handle these challenges while maintaining product quality. We also offer compact plants for rubber devulcanisation and for the re-work of non-vulcanised rubber scraps.”

The demand from the retreading industry is also shaping the company’s market strategy. “The growing importance of retreading highlights the need for durable and reliable equipment. Through companies like Saspol, which offers long-lasting and high-quality compression presses, it is possible to address this segment effectively and complement Comerio Ercole’s core technologies,” noted the executive.

“Saspol specialises in high-quality rubber compression presses, known for their durability and reliability over time. It provides solutions for solid tyres, tyre retreading and conveyor belt presses. There is no competition between the two companies as Saspol complements Comerio Ercole’s offering, allowing us to cover additional applications in the rubber industry and serve a wider range of customers also in India,” he added.

Ultimately, while high-precision machinery offers tangible gains in efficiency and cost control, it is not a standalone solution to the tyre industry’s challenges. The real impact lies in how effectively manufacturers integrate such technologies with broader operational strategies, especially as sustainability, recycling and evolving material demands reshape the production landscape.

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India’s growing importance in the global tyre and rubber industry received a strong endorsement with HF Group announcing a EUR 20 million investment in a new state-of-the-art manufacturing facility in Bengaluru.

The announcement was made during the inauguration of HF India’s new Assembly Hall Unit II, a milestone that reflects the company’s long-term commitment to India and its confidence in the country’s manufacturing future.

The proposed greenfield facility will be developed on a 10-acre site near Bengaluru Airport and is scheduled for completion by 2028. Spread across nearly 20,000 sq. metres, the new factory will be almost four times larger than the current assembly operations and will incorporate digital manufacturing, automation, smart production systems, and advanced engineering capabilities.

The upcoming facility will focus on productivity, precision engineering, sustainability, and smart manufacturing while supporting both the Indian market and HF’s global operations. The investment underlines the company’s confidence in India as a major manufacturing hub for the global tyre and rubber industry.

Ian Wilson, Managing Director & Co-CEO, HF Group, said, “This is not the end of our investment in India. It is perhaps the end of the beginning. India is entering a take-off decade and the economy runs on tyres. We see tremendous opportunities for growth and are committed to investing in the future of the Indian market.”

With more than 175 years of global experience, HF Group has steadily strengthened its presence in India. The journey began in 1995 with the establishment of Indus to serve the growing rubber processing industry. The partnership with HF Mixing Group in 2011 brought global mixing technology expertise to India, while the complete acquisition of the Indian subsidiary in 2024 marked another important milestone in the company’s India strategy.

Today, HF India manufactures and supports a broad portfolio of mixing and rubber processing equipment, including intermeshing and tangential mixers, banbury technology, mills, curing presses, and aftermarket services. The company also offers process support, training, upgrades, inspections, and spare parts under its customer-centric philosophy of ‘Holding the Customer’s Hand.’

Emphasising the importance of customer partnerships, Wilson said, “We are not here simply to sell machinery. We want to hold our customers’ hands throughout the entire lifecycle of their equipment and support them through process optimisation, performance improvements and future growth.”

As HF embarks on its next chapter in India, the new facility represents not only an investment in manufacturing capacity but also a long-term commitment to localisation, technology and customer partnerships.

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TBC Corporation (TBC), one of North America’s largest marketers of automotive replacement tyres through wholesale and franchise operations, has named Ron Harper as its new Chief Supply Chain Officer. He will report directly to President and CEO Don Byrd and assume responsibility for the company’s entire supply chain function.

Harper brings over 26 years of experience steering global supply chains for multi-billion-dollar enterprises. His most recent role was Executive Vice President of Supply Chain at PrimeSource Building Products, overseeing planning, inventory, repack operations, service metrics and analytics. He has also held senior logistics and strategy positions at Sonepar USA, Nordstrom, Samsung SEA, and JCPenney.

The new chief holds a master’s degree in supply chain management from the University of Denver and a bachelor’s in industrial management from Michigan Technological University. His appointment underscores TBC’s focus on strengthening operational efficiency and logistics performance.

Byrd said, “Ron’s depth of experience in building transformative supply chain solutions aligns with our deep commitment to providing customers with the high-level efficiency, product availability and agility they expect from TBC. As market needs change and demands fluctuate, TBC is continuing to respond by having a supply chain strategy that minimises disruptions and maximises efficiency to ensure the highest levels of customer support and satisfaction.”

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