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What is the story about?
Tyre stocks surged on Monday, October 20, after Ceat Ltd. reported strong second-quarter results. The company posted 14% year-on-year consolidated revenue growth, driven by 11% volume growth and a 3% increase in average selling prices (ASP).
EBITDA beat estimates sharply, driven by a 415-basis-point quarter-on-quarter (QoQ) and 350-basis-point year-on-year (YoY) expansion in gross margins, aided by a 5% QoQ decline in raw material costs.
The management reiterated its double-digit revenue growth guidance for FY26, with expectations of robust single-digit growth for the overall tyre industry.
The outlook is led by market share gains in passenger vehicle OEMs (particularly for tyres above 17-inch rim size), recovering replacement demand, and steady export momentum.
Ceat's Camso integration is progressing well, with customer transition and capacity expansion expected to be completed over the next three to six quarters. Post-completion, both revenue growth and margin expansion are likely to accelerate.
Despite short-term softness in Camso's performance, Ceat is well positioned to benefit from the demand recovery, aided by recent GST rate cuts, strong exposure to consumer-facing segments (PVs and 2Ws), continued market share gains, and long-term opportunities in exports and off-highway tyres (OHT).
Following Ceat's results, major tyre stocks like Apollo Tyres, MRF, and Balkrishna Industries traded higher in the range of 3% to 13%.
EBITDA beat estimates sharply, driven by a 415-basis-point quarter-on-quarter (QoQ) and 350-basis-point year-on-year (YoY) expansion in gross margins, aided by a 5% QoQ decline in raw material costs.
The management reiterated its double-digit revenue growth guidance for FY26, with expectations of robust single-digit growth for the overall tyre industry.
The outlook is led by market share gains in passenger vehicle OEMs (particularly for tyres above 17-inch rim size), recovering replacement demand, and steady export momentum.
Ceat's Camso integration is progressing well, with customer transition and capacity expansion expected to be completed over the next three to six quarters. Post-completion, both revenue growth and margin expansion are likely to accelerate.
Despite short-term softness in Camso's performance, Ceat is well positioned to benefit from the demand recovery, aided by recent GST rate cuts, strong exposure to consumer-facing segments (PVs and 2Ws), continued market share gains, and long-term opportunities in exports and off-highway tyres (OHT).
Following Ceat's results, major tyre stocks like Apollo Tyres, MRF, and Balkrishna Industries traded higher in the range of 3% to 13%.
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