Camso Acquisition Expands

CEATLTD

’s Global Footprint

India’s tyre industry ended CY25 on a strong note, aided by GST rationalisation, improved affordability, and rising consumer sentiment.

, with a diversified presence across OEM, replacement, and export markets, has emerged as a key beneficiary. While demand recovery and EV positioning provide structural growth visibility, near-term cost pressures from currency and rubber prices could temper earnings momentum. Demand Environment - GST revision: Boosted replacement demand, especially in rural markets. - OEM segment (29% of mix): - MHCV demand stabilising, +double digits in Q3. - LCVs/3Ws supported by e-commerce and logistics. - PVs strong, aided by financing and compact car preference. - Two-wheelers +high single digits; farm OEM +double digits on tractor revival. - Replacement segment (52% of mix): - Marginal dip (<1%) in scooters and PCR. - CEAT ranks third, trailing leader by ~3.5–4%; aims to bridge gap in 3–4 years. - Exports (19% of mix): Healthy traction in Europe, Latin America, Africa, especially PCR and OHT. Strategic Positioning - EV tyres: >30% share in PV/UV OEM category; ~20% in two-wheelers. Higher specifications support better realisations. - Capacity expansion: - Chennai plant capex ₹1,314 crore; adds 35 lakh PCR tyres by 2HFY28. - Nagpur facility expansion to 100,000 tyres/day. - Camso acquisition (Sep 2025): Strengthens off-highway segment; includes Sri Lanka plants and global brand rights. Integration progressing, with full control expected in 3–5 quarters. Financials & Outlook - Q3 revenue +20% YoY; EBITDA margin +364 bps YoY. - Gross margin contracted 109 bps sequentially due to stronger USD and rising input costs. - Rubber prices: Domestic ₹185–190/kg; international ~$1,700–1,800/tonne. - Management expects 100–150 bps margin impact in Q4 from currency and rubber inflation. - Valuation: CEAT offers steady long-term play on India’s auto cycle, replacement demand, and EV growth, though near-term cost headwinds may cap upside surprises.