How Did CEAT Gain Momentum in Q2 FY26 with GST Boost and Camso Integration?
CEAT Ltd reported a strong second quarter for FY26, supported by margin expansion, volume recovery, and favorable regulatory changes. The company benefited from the GST reduction on tyres, soft raw material costs, and premiumization initiatives that drove profitability and operating leverage. Its ongoing integration with Camso has further strengthened its global growth platform, setting the stage for sustained earnings momentum.
In Q2 FY26, CEAT posted revenue of ₹3,773 crore, up 14.2% year-on-year. EBITDA rose to ₹511 crore (margin 13.5%), reflecting a 250 bps improvement YoY, while PAT stood at ₹202 crore. The company attributed this performance to lower raw material prices, improved product mix, and efficiency gains in premium and export segments.
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The government’s decision to cut GST on tyres from 28% to 18% in September 2025 led to a ~7–8% price benefit (~₹1,500 per truck tyre). CEAT passed the entire benefit to customers, fueling demand recovery in Tier-2 and Tier-3 markets. Management highlighted that this move has revitalized replacement demand across both commercial and two-wheeler segments.
CEAT Q2 FY26 Key Financial Metrics
| Metric | Value | YoY / QoQ Change |
|---|---|---|
| Revenue | ₹3,773 crore | +14.2% YoY |
| EBITDA | ₹511 crore | 13.5% margin, +250bps YoY |
| PAT | ₹202 crore | Improved margins |
| Debt | ₹2,944 crore | D/E 0.67x, comfortable |
| Capex (Q2) | ₹185 crore | H1 total ₹415 crore |
Management highlighted steady demand trends across segments. For Q3, replacement demand is expected to rise aided by GST cuts and rural recovery. Segment-wise, MCV tyres are projected to grow 5–6%, 2W tyres 7–8%, while passenger car tyres will see flat to slightly positive growth. OEM passenger car demand may grow 6–8%, and OHT/agri tyres are likely to witness high-teens growth.
Raw material costs declined by about 5% QoQ, with natural rubber softening and INR depreciation limited to 3%. The raw material basket remains benign, helping CEAT maintain sustainable margins in the 13–14% range for FY26–27.
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One of the key developments this quarter was the smooth integration of Camso (OHT), completed in September 2025. The plant has begun supplying to Michelin and will start direct sales within 3–4 quarters. Currently operating at 50% capacity, Camso is expected to ramp up in coming quarters, offering margin-accretive synergies and global access in the off-highway tyre (OHT) segment.
On the balance sheet front, leverage remains under control. Despite the Camso acquisition outflow, debt-to-equity is steady at 0.67x and debt-to-EBITDA at 1.7x. Capex for the quarter was ₹185 crore, taking H1 capex to ₹415 crore — aligned with ongoing modernization and premium product expansion.
CEAT continues to emphasize premiumization, having launched the ‘Rock R’ mining tyre in Q2. The company is gaining traction in the EV tyre segment, where EV-specific tyres contribute 30% of passenger car and 20% of two-wheeler revenues. Exports have also shown strong momentum across Europe, Africa, and Latin America, expanding CEAT’s global footprint.
Going ahead, management expects post-GST demand recovery, stable margins, and Camso-driven international growth to sustain profitability. With improved operational leverage and stable raw material outlook, CEAT appears well-positioned to maintain double-digit revenue growth through FY27.
Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, observes that CEAT’s strong execution, margin control, and post-GST volume revival create a robust foundation for the next growth cycle. The integration of Camso enhances CEAT’s positioning in the global OHT segment, while premiumization and EV product diversification further derisk the business model.
With leverage under control and consistent EBITDA improvement, CEAT is entering a phase of stable, sustainable profitability. Investors can monitor volume recovery trends and Camso utilization for cues on the next leg of value creation.
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Related Queries on CEAT Results
- What Boosted CEAT’s Margins in Q2 FY26?
- How Will the GST Cut Impact CEAT’s Future Demand?
- What Role Does Camso Play in CEAT’s Global Expansion Strategy?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
