📈 Fitch Affirms Ceat Kelani at 'AA+(lka)'; Outlook Stable

Fitch Ratings has affirmed Ceat Kelani Holdings Pvt Limited’s (CKH) National Long-Term Rating at 'AA+(lka)' with a Stable Outlook, driven by its market leadership in local tyre manufacturing and a resilient financial profile with low leverage. • Financial Health & Outlook • Liquidity: Robust with LKR 3.3 Bn in cash against LKR 929 Mn short-term debt maturing in FY27. • Leverage: EBITDA net leverage expected to remain comfortably below 1.0x, peaking at 0.6x in FY28. • Projections: Revenue projected to dip 0.3% in FY27 before recovering at a 4.8% CAGR by FY30. • Sector & Margin Risks • Margin Compression: Gross profit margin expected to fall below 20% in FY27 (from 24% in FY26) due to higher raw material and energy costs linked to the Iran war. • EBITDA Margin: Forecast to decline to 9.5% in FY27. • External Pressures: High exposure to price-sensitive end-markets and rising competition from imported tyres limit cost pass-through capability. • Investments & Capital Allocation • Growth capex set at LKR 2.5 Bn (FY27) and LKR 1.5 Bn (FY28) for production facility upgrades to boost product quality, particularly radial tyres. • Dividend payouts planned at LKR 1.5 Bn (FY27) and LKR 1.0 Bn (FY28).