Ceat laid out its growth and margin roadmap at its investor meet held on 26 May 2026, flagging near-term pressure from raw material cost inflation and price hikes while reiterating confidence in long-term market share gains and the transformative potential of its Camso acquisition — though brokerages remain divided on the stock.
Investor meet key takeaways:
Vision 2031: Ceat aspires to grow the fastest amongst peers over FY26-31E, led by market share gains in passenger car and utility vehicle tyres (PCUV) and truck radials. It expects international saliency to rise to 33 per cent (21 per cent in FY26), led by an export push and an expanding Camso portfolio, with a focus on enhancing profitability.
In the near term, demand remains healthy; however, given the steep price hikes, there could be some moderation in H2FY27E.
On the margin front, raw material costs are likely to be up 20 per cent quarter-on-quarter (Q-o-Q) in Q1; it has taken 5-6 per cent increases in April and another 5-6 per cent is likely by July-26 for replacement; for original equipment (OE), single-digit hike was in April and the rest will be taken in July; for exports, it expects 5-6 per cent hikes in Q1. Overall, it expects H1 margins to remain under pressure due to commodity headwinds.
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Brokerages’ view
Nomura | Buy | Target: 4,276
The brokerage views current valuations of Ceat at approximately 6x FY28 enterprise value-to-Earnings before interest, tax, depreciation and amortisation (EV/Ebitda) as inexpensive, given approximately 14 per cent Ebitda compound annual growth rate (CAGR) over FY26-28 and return on equity normalising to approximately 17 per cent by FY28.
Ceat has consistently gained market share in the passenger car replacement (PCR) segment, moving from fifth to second in the premium passenger car and UV category in just four quarters — from Q1FY25 to Q4FY26 — while maintaining leadership in the two-wheeler segment. Going ahead, the company remains focused on expanding share in passenger vehicles and truck and bus radials (TBR), while targeting a high share of business in the electric vehicle segment — currently at 31 per cent in cars and 19 per cent in two-wheelers — which Nomura sees as a structural growth driver given rising EV penetration.
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Motilal Oswal Financial Services | Buy | Target: ₹4,228
The brokerage, in its report, said that the company outlined a roadmap for CAMSO integration, highlighting key growth drivers and the potential for the business to achieve 20-25 per cent Ebitda margins over the coming years.
In India, while demand across segments remains healthy currently, it is likely to moderate in the near term following sharp price hikes to offset rising input costs. Replacement demand for truck and bus radials (TBR) is expected to grow in single digits, passenger car radials (PCR) at 3-5 per cent, and scooters in high single digits in FY27.
Raw material prices are expected to witness a sharp 15-20 per cent quarter-on-quarter (Q-o-Q) increase in Q1FY27. While Ceat has already taken a 5 per cent price hike, under-recovery remains at 5 per cent — expected to keep near-term margins under pressure. However, Motilal Oswal believes long-term integration benefits from Camso are likely to offset near-term concerns on margin pressure.
Emkay Global Financial Services | Reduce | Target: ₹3,600
Emkay has maintained a ‘Reduce’ on Ceat, citing near-term margin pressure, potential demand moderation from price hikes, and back-ended benefits from the Camso acquisition.
Customer transition to Ceat is expected to be completed in H1FY27, while the raw material supply chain is likely to be in place by the end of FY27. Growth for Camso is expected to be largely back-ended — with cost pressures persisting through FY27, gradual margin accretion from FY28, and full benefits materialising only in FY29. Over the longer term, management aims to increase international revenue to one-third of total sales, from approximately 19 per cent currently.
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