CEATLTD - CEAT

📊 NSE: CEATLTD 🏢 Tyres 📅 Last Updated: 12/13/2025 20:43

💰 Financial Performance

Revenue Growth by Segment

Standalone revenue grew 12.2% YoY in Q2 FY26. Volume growth was led by OEM and International business with strong double-digit growth, while the Replacement segment grew in strong single digits.

Geographic Revenue Split

Exports contributed 19% of revenue in FY25. Post-CAMSO acquisition, export contribution is expected to increase to 26%. Domestic operations account for the remaining 81%.

Profitability Margins

Consolidated Gross Margin stood at 40.9% in Q2 FY26, an improvement of over 400 bps QoQ. Net Profit Margin was 4.92% in Q2 FY26 compared to 3.68% YoY.

EBITDA Margin

Consolidated EBITDA margin for Q2 FY26 was 13.5%, representing a 250 bps improvement YoY and 259 bps improvement QoQ, driven by lower raw material prices and better sales realization.

Capital Expenditure

The company completed the CAMSO acquisition on September 1, 2025. Scheduled debt repayment obligations are INR 333.91 Cr for FY25 and INR 382.76 Cr for FY26.

Credit Rating & Borrowing

CARE Ratings assigned a 'Positive' outlook with an overall gearing of 0.76x as of March 31, 2025. Interest Service Coverage Ratio stood at 5.33x in Q2 FY26.

⚙️ Operational Drivers

Raw Materials

Natural rubber and crude-linked derivatives (carbon black, synthetic rubber) are primary inputs. Rubber price volatility caused a 269 bps moderation in operating margins during FY25.

Key Suppliers

Michelin (divested the CAMSO brand to CEAT).

Capacity Expansion

Acquisition of CAMSO assets in September 2025 significantly expands capacity in the premium Off-Highway Tyre (OHT) segment.

Raw Material Costs

Operating margins moderated to 11.30% in FY25 due to a spike in rubber prices. Q2 FY26 saw a 400+ bps expansion in gross margins as raw material costs softened.

Manufacturing Efficiency

Overall volumes increased by 10% YoY in FY25, with growth across all segments despite raw material headwinds.

📈 Strategic Growth

Expected Growth Rate

10%+

Growth Strategy

Integration of the CAMSO acquisition to become a leading player in the premium OHT segment, targeting an increase in OHT revenue share from 17% to 25%. The company is also focusing on premiumization in the PC/UV and 2W segments.

Products & Services

Tyres for 2-wheelers, passenger cars, utility vehicles, trucks, buses, and off-highway equipment (OHT).

Brand Portfolio

CEAT, CAMSO.

New Products/Services

Expansion into premium OHT segments via CAMSO is expected to be margin-accretive in the medium term.

Market Expansion

Targeting international market growth to reach a 26% revenue share post-CAMSO integration.

Strategic Alliances

Acquisition of CAMSO brand and assets from Michelin.

🌍 External Factors

Industry Trends

The industry is shifting focus from lower-margin Truck & Bus segments to higher-margin Passenger Car, UV, and OHT segments. CEAT is positioning itself through the CAMSO acquisition to capture this premiumization trend.

Competitive Landscape

Operates in a highly competitive industry with susceptibility to pricing pressures from both domestic and international players.

Competitive Moat

Moat is built on a robust distribution network, RPG Group financial flexibility, and a growing niche in the premium OHT segment which is less commoditized than standard tyres.