CEAT Kelani Holdings (CKH), Sri Lanka’s leading pneumatic tyre manufacturer, has retained its National Long-Term Rating of ‘AA+(lka)’ from Fitch Ratings for the sixth consecutive year, with a Stable Outlook, as its strong market position and financial resilience continue to offset pressures from rising costs and intensifying competition.

The ‘AA+(lka)’ rating is the second-highest category on Fitch’s national rating scale and indicates a very strong capacity to meet financial commitments.

Fitch said CKH’s established leadership in Sri Lanka’s pneumatic tyre market and resilient financial profile remained key strengths supporting the rating. At the same time, the rating agency highlighted the company’s exposure to price-sensitive, cyclical and highly competitive markets.

The Stable Outlook reflects Fitch’s expectation that CKH will maintain its market position despite higher input costs and increasing competition from imported tyres. The agency also expects the company to preserve adequate credit metrics through periods of weaker earnings and increased investment requirements.

CKH’s established brand, extensive dealer network and ability to adjust prices are expected to help the company manage market volatility and protect its position across key tyre segments.

However, Fitch expects margins to come under pressure in the near term as prices of imported and locally sourced raw materials rise, while higher energy costs increase conversion expenses.

The company’s relatively low leverage and sound liquidity position are expected to provide a financial cushion against these pressures.

Fitch also pointed to CKH’s planned capital investments as an important factor in its future competitive position. The company is expected to incur annual maintenance capital expenditure of around Rs.700 million over the next four years, while growth capital expenditure is projected at Rs.2.5 billion in FY27 and Rs.1.5 billion in FY28.

These investments include upgrades to production facilities aimed at improving product quality, particularly in the radial tyre segment.

The investments come as CKH seeks to strengthen its manufacturing capabilities and maintain its position in a market facing increasing competition from imported tyres.

Commenting on the rating, CEAT Kelani Holdings Chairman Chanaka De Silva said the continued rating reflected the importance the company placed on financial discipline, operational adaptability and long-term investment.

“A credit rating is ultimately a measure of confidence in an organisation’s ability to make sound decisions today while remaining financially equipped to pursue its ambitions for tomorrow,” he said.

De Silva said maintaining the rating through successive business cycles reinforced the company’s focus on disciplined stewardship and strengthening its manufacturing capabilities.

“We remain focused on building a stronger, more competitive and increasingly capable manufacturing enterprise that can create sustainable value for all our stakeholders,” he said.

The latest Fitch assessment comes as CKH continues to operate as the market leader in Sri Lanka’s tyre industry. The company’s established distribution network and brand strength provide it with a significant domestic market presence, while its pricing flexibility is expected to help it respond to changing market conditions.

CEAT, the tyre brand, originated in Italy and has research and testing facilities in India and Germany. In Sri Lanka, the brand was ranked the country’s most valuable tyre brand by Brand Finance and was named the ‘Most Loved Tyre Brand’ by LMD in both 2025 and 2026.

The continued AA+ rating therefore provides an indication of CKH’s financial capacity at a time when the company is simultaneously facing higher production costs, imported-tyre competition and the need to invest substantially in upgrading and expanding its manufacturing base.