Indian tyre maker posts robust margins and doubles down on electric vehicle segment as it digests the Sri Lankan acquisition

Sharad Matade

CEAT delivered a strong second-quarter performance, with revenues rising 12.2 percent year-on-year, even as the company navigates turbulent US tariff waters and integrates its recently acquired Sri Lankan off-highway tyre business.

The Mumbai-based tyre manufacturer reported standalone earnings before interest, tax, depreciation and amortisation (EBITDA) of INR 5.07 billion for the quarter ended September, with margins expanding to 13.7 percent. Net profit was INR 2.02 billion, a significant improvement from last year’s INR 1.22 billion.

“We’ve had a good quarter,” Managing Director Arnab Banerjee told analysts on an earnings call, noting that gross margins had climbed back into the company’s long-term target range of 40-42 percent after benefiting from softer raw material prices.

CAMSO Bet Takes Shape

The quarter’s headline event was CEAT’s completion of the CAMSO acquisition from Michelin on 1 September, a deal that positions the Indian manufacturer as a leading player in premium off-highway tyres. The company spent INR 12.32 billion in total for the transaction: INR 2.72 billion in equity, INR 7.02 billion in debt, and INR 2.38 billion for intangibles like trademarks and patents.

Chief Financial Officer Kumar Subbiah said the acquisition pushed consolidated debt to INR 29.44 billion by quarter-end, though debt-to-EBITDA remains comfortable at 1.8 times and debt-equity at 0.64 times. “We have enough leverage to provide necessary growth capital going forward,” he assured investors.

The company has historically maintained conservative financial thresholds, preferring not to exceed debt-to-EBITDA of 3 times or debt-equity of 1 time at peak levels. Although it has never exceeded INR 21 billion in absolute debt before, management is confident in the current INR 30 billion debt level, given the growth opportunities ahead.

The Sri Lankan plant currently operates at 50 percent capacity utilisation, offering significant upside potential. However, CEAT will not gain full control of the value chain for another five to six quarters, as it continues purchasing semi-finished goods from Michelin while setting up upstream mixing and calendaring equipment.

“There have been no surprises based on one month of operation,” Banerjee said, adding that the business is progressing well and remains on track to be margin-accretive in the medium term.

Aggressive Investment Programme

CEAT is in the midst of a substantial capacity expansion across multiple facilities. The company spent INR 1.85 billion on capital expenditure during the quarter, bringing the first-half total to INR 4.15 billion. Management expects full-year capex of around INR 10 billion, excluding CAMSO acquisition costs.

The investment breakdown reveals strategic priorities: INR 1 billion was allocated to research and development, information technology, plant maintenance and moulds. Another INR 0.50 billion is being used to expand truck-bus radial tyre capacity towards 2,000 units, an ongoing multi-year project.

The Ambernath plant expansion absorbed INR 0.70 billion, while the Chennai factory received the largest share at INR 1.60 billion for passenger car downstream operations and motorcycle scooter production. Debottlenecking initiatives across facilities accounted for INR 0.40 billion.

“Expansion projects are progressing as per plan,” Banerjee said, adding that overall capacity utilisation stands at 80-85 per cent currently.

Additional investments are planned for Sri Lanka to install upstream equipment at the CAMSO facility, enabling the company to stop purchasing semi-finished goods from Michelin and control the entire manufacturing process.

Tariff Turbulence

The company faces mounting pressure in the US market, where 50 percent tariffs on off-highway tyres have nearly halted exports. CEAT’s sales of off-highway tyres to America slowed to “practically zero” by quarter-end, though passenger car and truck-bus radial exports continued.

For passenger and truck-bus radials, the 25 per cent tariff applies uniformly across countries, leaving India at no disadvantage. CEAT is partially absorbing the impact while gradually passing costs to customers over the next two to four quarters.

The CAMSO operation in Sri Lanka faces a 20 per cent duty on US exports, with roughly half of that tariff currently being absorbed. “We expect CAMSO also to pass on the full impact of tariffs in maybe two to three quarters,” Banerjee said.

Despite the low base, CEAT’s management remains sanguine. “Our stake in the US market is still very low, so the overall impact on our growth and profitability was not very material,” Banerjee noted.

Domestic Boost from GST Cut

A positive development came late in the quarter when the Indian government cut goods and services tax (GST) on tyres from 28 to 18 percent, and on farm tyres from 18 to 5 percent, effective 22 September. The move is expected to boost demand in semi-urban and rural markets.

“There is significant benefit to customers,” Banerjee said. “The 10 percent duty cut works out to around 7-8 per cent on the selling price. For a truck tyre, it could be INR 1,500 per tyre, which is significant.”

CEAT passed the entire benefit to its channel partners and advised them to do likewise for end customers. The company isn’t contemplating any price increases, given softening raw material costs.

The GST announcement created a temporary dip in September, as buyers deferred purchases and trade down-stocked in anticipation. The replacement market, which had been growing at nearly double-digit rates, contracted during the month. However, momentum is expected to return strongly.

Segment Performance

Original equipment manufacturer (OEM) sales were the star performer, surging in the mid-20s as CEAT secured fitments on cars with larger rim sizes. International business grew in the high teens, while replacement business managed mid-single-digit growth despite September’s dip.

Two-wheeler tyres saw robust demand driven by rural markets, while the passenger car segment grew in mid-single digits. Farm tyre growth in the OEM segment reached the mid-teens.

International markets delivered particularly strong results, with mid-teens growth across key clusters in Europe, Africa and the Middle East. Europe, CEAT’s most profitable export market, saw strong traction in passenger car tyres. Brazil recorded good growth in two-wheeler tyres. Passenger and truck-bus radials now account for 65 per cent of exports, with CEAT claiming to be India’s leading passenger car tyre exporter.

Electric Vehicle Push

CEAT has established strong positions in India’s growing electric vehicle segment, holding a 30 percent share in the OEM passenger car and utility vehicle EV market and a 20 per cent share in the two-wheeler EV market.

“We continue to focus on product development for emerging vehicle sizes, and we have good respect and credibility amongst OEMs to get fitted on upcoming new models,” Banerjee said.

The company launched two innovations during the quarter: SecuraDrive CIRCL, a concept tyre made from 90 per cent sustainable bio-based materials, and RockRad, a premium mining tyre showing early promise.

On the digital front, CEAT became one of the first companies to deploy an agentic chatbot on its website, currently in beta, to personalise customer journeys. The company’s website traffic exceeded 1 million, with organic traffic up 19 per cent year-on-year. Leads for premium SUV users exceeded 30 per cent, while positive brand sentiment jumped 28 per cent in average interaction per post year-on-year.

Raw Material Relief

Raw material costs provided relief, declining 5 per cent quarter-on-quarter. International natural rubber prices held steady at USD 1,700-1,750 per tonne, while domestic prices softened towards import parity by quarter-end, dropping just over INR 10 per kilogram.

Crude oil hovered around USD 65 per barrel, at the lower end of its recent range, amid weak Chinese demand and ample supply.

“Taking into consideration current base prices and the impact of rupee depreciation in the last eight weeks, we expect raw material prices to remain at current levels in Q3,” Subbiah said.

Outlook

Looking ahead, management expects to maintain double-digit growth momentum while keeping margins steady. The third quarter typically sees revenue flatten or dip slightly due to the festival season and the onset of winter, which affects northern and eastern markets.

Replacement demand for medium- and heavy-duty commercial vehicle tyres should track GDP growth at mid-single digits, while two-wheelers should be around 7-8 per cent. At the same time, passenger cars remain soft, in the zero-to-low single digits.

“The GST change will be a positive factor for industry, especially in small towns and rural markets,” Banerjee said. “We also think we’ll arrive at some clarity on the US tariff situation sometime during Q3 or Q4.”

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Balkrishna Industries Ltd. (BKT) has expanded its partnerships in India’s premier men’s T20 cricket league to eight teams, adding Royal Challengers Bengaluru for the upcoming season as it seeks to strengthen its position in the country’s consumer tyre market.

The company said its BKT Tyres brand would continue as Official Tyre Partner to Kolkata Knight Riders, Sunrisers Hyderabad, Rajasthan Royals, Mumbai Indians, Gujarat Titans, Punjab Kings and Lucknow Super Giants, alongside the newly added Bengaluru franchise.

The move comes as BKT advances its entry into India’s consumer tyre segment, using the tournament as a platform to expand visibility and engage a broader customer base, including commercial operators and private vehicle owners.

The partnerships are structured as long-term arrangements, incorporating stadium branding, broadcast integrations, dealer activations and digital campaigns aimed at strengthening fan engagement.

Rajiv Poddar, JMD of BKT, said: “Partnering with sporting institutions has always been central to BKT’s philosophy of Growing Together with communities. Cricket is one of the most influential cultural forces in India, uniting people across geographies, generations and backgrounds. Our continued partnerships as the Official Tyre Partner under the BKT Tyres brand allow us to connect with audiences in a meaningful way while strengthening our presence in the tyre segment. Through this association, we will further amplify our ‘Elevate Your Drive’ campaign featuring Ranveer Singh across broadcast and digital touchpoints, bringing the campaign’s message of ambition, progress and forward momentum to millions of viewers. These collaborations reflect our commitment to building long-term relationships founded on teamwork, performance and shared aspirations.”

Venky Mysore, Chief Executive of Kolkata Knight Riders, said: “BKT Tyres is not just a partner they are a brand that shares our relentless pursuit of performance. This renewed association is a testament to the trust we have built together and the ambition we carry forward. As BKT accelerates its growth in India's consumer market, the Knight Riders brand gives them the platform, the passion, and the global scale to make that journey count. At Knight Riders Sports, we do not build partnerships for visibility alone we build them for impact. This collaboration is precisely that: two performance-driven organisations, aligned in purpose, investing in a future they intend to win together.”

Rajesh Menon, Chief Executive of Royal Challengers Bengaluru, said: “Royal Challengers Bengaluru is proud to welcome BKT Tyres as our Official Tyre Partner. At RCB, we believe in pushing boundaries, embracing ambition, and creating meaningful connections with our fans, values that closely align with BKT’s ‘Elevate Your Drive’ philosophy. Together, we aim to accelerate our shared vision of excellence, resilience, and forward momentum both on and off the field.”

K Shanmugam, Chief Executive of Sunrisers Hyderabad, said: “We are happy to continue our partnership with BKT Tyres as part of this T20 cricket league. This collaboration reflects a strong alignment of values, bringing together a shared focus on excellence, performance, and consistency. Together, we move forward with clear intent, committed to raising standards both on and off the field, while delivering a meaningful and engaging experience for fans.”

Alok Chitre, Chief Operating Officer of Rajasthan Royals, said: “We are delighted to partner with BKT Tyres for the sixth year, with a shared energy and drive for performance that continues to strengthen our association. Their commitment to sport, and cricket specifically, reflects a clear focus on the growth of the game and its fan ecosystem in India. As we advance in scale and influence, we look forward to building on this partnership in a meaningful way this year as well.”

A Mumbai Indians spokesperson said: “BKT Tyres has been a valued long-term partner of Mumbai Indians, and this continued partnership reflects a shared commitment to consistency and performance. We look forward to building on this partnership through the season.”

Colonel Arvinder Singh, Chief Operating Officer of Gujarat Titans, said: “Gujarat Titans are pleased to continue the association with BKT Tyres. Partnerships like these reflect a shared commitment to performance, consistency and long-term growth. Such collaborations provide a strong platform for teams and brands to connect with fans across the world, and we look forward to building on this association while continuing to engage meaningfully with our supporters and striving for excellence both on and off the field.”

Satish Menon, Chief Executive of Punjab Kings, said: “We are very happy to continue our journey with BKT Tyres. They have been a loyal and valued partner for the Punjab Kings over the years. Their commitment to excellence matches our ambitions, and it is always a pleasure to work with a brand that understands the pulse of the sport and its fans so well.”

Vinay Chopra, Chief Executive of RPSG Sports Private Limited, said: “At Lucknow Super Giants, we believe that strong partnerships are built on shared values of performance, resilience, and ambition. Our association with BKT Tyres reflects this synergy, as both brands are committed to pushing boundaries and consistently striving for excellence. As we gear up for another exciting season, we look forward to engaging our fans more deeply and creating meaningful experiences together through this partnership.”

BKT said its sports partnerships form part of a broader global portfolio spanning multiple disciplines, aimed at reinforcing brand visibility and consumer engagement.

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Goodyear India Limited said its board has taken note of the resignation of Abhishek Arora as Director – Human Resources, India, with effect from April 20, 2026, and approved the appointment of Vishal Dhingra as HR Director, South Asia from April 21, 2026.

Arora, who will also cease to be a senior management personnel member on April 20, 2026, resigned to explore external growth opportunities, according to the company.

The board approved Dhingra’s appointment following the recommendation of the Nomination and Remuneration Committee. He will assume the role as a senior management personnel from April 21, 2026.

Dhingra has more than 25 years of experience in human resources. He joined Goodyear in July 2020 as Director HR – India and currently serves as HR Director – ASEANZ. Prior to this, he held roles at PepsiCo, India, GlaxoSmithKline Consumer Healthcare Limited, Eicher Tractors and Ballarpur Industries Limited.

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India has concluded that imports of emulsion styrene butadiene rubber (ESBR) of the 1500 series from the European Union, Japan, South Korea, Russia and Thailand were dumped, following an anti-dumping investigation initiated in March 2025.

The Directorate General of Trade Remedies (DGTR), under the Ministry of Commerce and Industry, found that dumping margins across all subject countries were above the de minimis threshold and “significant”.

The investigation was launched after Reliance Industries Limited filed an application alleging injury from imports of the product, which is widely used in tyre manufacturing and other rubber goods. The authority determined that the application met the requirements for standing, with support from Indian Synthetic Rubber Private Limited.

The product under consideration, ESBR-1500, is primarily used in tyres due to its abrasion resistance and ageing stability. The DGTR concluded that domestically produced material is comparable to imported goods and can be used interchangeably.

The period of investigation covered October 2023 to September 2024, with injury analysis spanning four financial years. During this time, imports from the subject countries rose overall and accounted for more than 90 per cent of total imports throughout the period.

The authority found that import volumes were highest during the investigation period and had increased relative to domestic production and consumption.

Dumping margins varied by country. Imports from the European Union and Japan were found to have margins in the range of 10–20 per cent, while Russia showed higher margins of 20–30 per cent. South Korea and Thailand recorded lower ranges, generally between 0–10 per cent for cooperating producers and up to 10–20 per cent for others.

The DGTR conducted a cumulative assessment of imports, concluding that goods from the subject countries compete with each other and with domestic production in the Indian market.

On injury, the authority determined that increased imports had affected the domestic industry through price suppression and declining profitability. It noted that while demand for the product rose steadily, the domestic industry’s financial performance weakened over the same period.

The DGTR also rejected arguments that the injury was caused by internal inefficiencies or raw material volatility, stating that such fluctuations were global and not specific to India.

The authority concluded that dumped imports had caused material injury to the domestic industry, establishing a causal link between import volumes and the deterioration in financial performance.

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Fornnax Technology, a global leader in recycling equipment manufacturing, has officially brought Sushil Upadhyay on board as the new Head of its Service Department, a leadership transition that takes effect immediately. With a professional background spanning over 26 years, Upadhyay arrives with extensive experience drawn from multiple multinational corporations. Throughout his career, he has successfully managed and coordinated large, cross-functional teams comprising more than 300 professionals. Within his new capacity at Fornax, his primary focus will involve steering strategic transformations within the service domain, with the objective of optimising equipment reliability, maximising value across the lifecycle of machinery and elevating the sustained performance of the company’s worldwide installed base of industrial recycling solutions.

In the coming year, the service division under his leadership is set to concentrate on a series of clearly defined operational objectives. Key among these is the effort to curtail instances of unexpected machinery downtime by integrating both preventive and predictive maintenance approaches. The team also intends to roll out measurable performance benchmarks for service delivery, which will include tracking metrics such as speed of response, Mean Time to Repair (MTTR) and overall equipment uptime. Moreover, there will be a concerted push to reinforce the availability of spare components by optimising regional warehousing and distribution processes.

Further developments on the agenda involve the creation and delivery of well-structured training modules targeting technical expertise and workplace safety, aimed at enhancing the capabilities of service personnel. In parallel, the organisation plans to introduce digital tools designed to boost transparency in operations and enable customers to more effectively monitor service activities. These combined efforts underscore Fornnax’s commitment to evolving its service infrastructure in response to growing demands for efficiency and reliability.

Jignesh Kundaria, Director & CEO, Fornnax, said, “Our people are the true engine behind our innovation and execution. As we scale globally and expand our footprint across diverse recycling applications, cultivating a culture of excellence remains central to our strategy. In 2026, we are intensifying our focus on talent development, leadership growth and building a high-ownership, high-accountability environment that drives continuous improvement across engineering, manufacturing, and service. This will set new benchmarks in the industry, and I believe Upadhyay will play a crucial role in this journey.”

Upadhyay said, “Fornnax’s strong positioning in high-capacity shredding solutions and its commitment to sustainable recycling deeply resonated with me. The company’s engineering strength and rapid growth trajectory present a powerful opportunity to build a world-class service organisation. In an industry where machine reliability directly impacts customer profitability, service becomes a direct driver of customer success. I am excited to elevate Service from a support function to a strategic growth enabler, which is specifically focused on uptime, lifecycle value and long-term partnerships.”

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