CEAT is rolling out not just tyres but also cash-burning expansion plans faster than an Ola driver cancels your ride. Revenue? ₹3,529 Cr in Q1 FY26, up 10.5% YoY. Profit? Only ₹115 Cr, down 22.8% because apparently, margins slipped harder than bald tyres in monsoon. On top of that, they just gobbled up Michelin’s CAMSO construction tyre business for US$225M while also throwing ₹450 Cr at Chennai and ₹400 Cr at Nagpur. Clearly, CEAT wants to be Michelin + MRF + Apollo combined… minus the fat balance sheet.
2. Introduction
Picture this: CEAT, the RPG Group’s rubbery child, started life making cables in Italy, then jumped into tyres, and is now playing global monopoly. From selling scooter tyres in Indian gullies to grabbing assets from Michelin, the company clearly wants to be the Akshay Kumar of tyres—present in every industry, every role, every remake.
The problem? Tyre making is a commodity slog. Raw material (natural rubber, crude derivatives) decides your fate. One bad cycle, and profits vanish faster than your salary after Zomato + Swiggy weekend orders. But CEAT, like a Bollywood hero, insists on expansions, new products (EV tyres, OHT tyres), and global forays (Sri Lanka, Indonesia, now US entry).
But are they stretching too thin? Or will the Michelin deal give them enough horsepower to compete with giants like MRF and Apollo? Strap in. This ride is going to be bumpy.
3. Business Model – WTF Do They Even Do?
CEAT’s business is basically:
Truck & Bus tyres (30%) → Those big fat rubbers keeping Indian highways alive, while truckers fight dhabas over dal fry.
2/3 Wheelers (28%) → Hero Splendor, Bajaj Chetak, and Ola EV scooters all ride on these.
Passenger Cars/UVs (20%) → From WagonR to Creta, CEAT’s everywhere.
Off-Highway (15%) → This is where Michelin’s CAMSO deal fits in—big money construction/earthmover tyres.
LCV/Others (7%) → The ignored cousins.
Revenue split? 54% replacement, 27% OEM, 19% exports. Which means half their sales depend on you and me changing tyres after hitting potholes.
So CEAT’s job is clear: sell rubber donuts to OEMs, replace old ones, and now expand into global off-highway madness. But like every desi company, they garnish it with sustainability talks—“50% renewable energy, 40% sustainable materials by 2030.” Translation: “Please don’t call us tyre polluters.”
4. Financials Overview
Metric
Latest Qtr (Q1 FY26)
YoY Qtr (Q1 FY25)
Prev Qtr (Q4 FY25)
YoY %
QoQ %
Revenue
3,529
3,193
3,421
+10.5%
+3.2%
EBITDA
388
383
388
+1.3%
0.0%
PAT
115
154
99
-25.3%
+16.2%
EPS (₹)
27.8
38.1
24.6
-27.0%
+13.0%
Commentary: Revenue growing, EBITDA flat, profit shrinking. EPS looks like a tyre with half air. CEAT is grinding gears—growth is there, but profitability has clearly hit a pothole.
5. Valuation Discussion – Fair Value Range
Let’s not pretend Screener’s P/E is gospel. We do our own jugaad:
P/E Method: EPS TTM = ₹107. Industry P/E ~32, CEAT at 29. Fair range = 25x–32x → ₹2,675 – ₹3,425.
EV/EBITDA Method: EBITDA TTM = ~₹1,479 Cr, EV = ₹15,363 Cr → EV/EBITDA ~10.3. Fair range = 9–12x → ₹13,300 – ₹17,800 Cr EV → Equity fair range ₹2,800 – ₹3,750/share.
DCF (Loose Maths): Assume FCF ₹500 Cr growing 8% for 10 years, discount 12%. Value ~₹12,500–15,500 Cr → ₹3,100 – ₹3,850/share.
👉 Fair Value Range (Education Only, Not Advice): ₹2,700 – ₹3,800. Disclaimer: This is for educational comedy, not SEBI bhavishyavani.
6. What’s Cooking – News, Triggers, Drama
CAMSO Acquisition: US$225M deal with Michelin for off-highway tyres. A bold move,
