Ceat expects biggest boost for tractor, bike tyres after GST rate cuts, CEO says
India has slashed the GST rate on most tyres to 18% from 28%, while tractor tyres will attract 5% tax vs 18% earlier. Ceat is passing on the benefits in full.
Ceat Ltd. expects demand for its tractor and commuter-motorcycle tyres to surge the most due to GST rate cuts, according to its chief executive officer.
“We expect sales of commuter motorcycles to go up in semi-urban and rural households, and farm sales also could go up,” Arnab Banerjee told Reuters in an interview.
On 4 September, the Narendra Modi government announced GST rate cuts on hundreds of items—from soaps to small cars and motorcycles—in India’s biggest indirect tax reform since the Goods and Services Tax was first introduced on 1 July 2017. The new, simplified GST structure reduces the tax of most tyres to 18% from 28% earlier, while tractor tyres will attract 5% tax versus 18% earlier. The changes are effective 22 September.
Ceat will pass on the tax benefits in full to customers.
According to Ceat, the farm sector accounts for a tenth of its annual revenue, while commuter motorcycles—which make up the bulk of two-wheelers sold in India—are among its biggest segments. Ceat does not disclose the revenue it earns from this business. The company gets about 53% of its revenue from replacement demand, 28% from automakers, and the rest from exports.
That said, Ceat is likely to grow its revenue in the double-digits in FY26, led by replacement demand in the two-wheeler and commercial-vehicle categories, Banerjee had said during an earnings call in July.
In the April-June quarter, Ceat’s revenue grew 10.5% year-on-year to ₹3,530 crore, due to sales of two-wheeler, truck and bus tyres. In Fiscal 2025, revenue grew 14%.
