CEAT MD warns war may shrink tyre demand as Hormuz closure zeroes West Asia exports
CEAT runs at 90% capacity and redirects exports after West Asia demand collapsed amid conflict. FY26 revenue topped Rs 15,000 crore with net profit up 47% to Rs 697 crore. Price hikes of 2-3% in March offset a 10% raw material rise, with further 5-6% hikes possible. Camso buy to lift exports to 24%.
What happened
CEAT MD says war-driven Hormuz closure cut West Asia demand to zero; firm redirects exports, runs at 90% capacity, hikes prices. FY26 revenue topped Rs 15,000
Key facts
- 90% capacity utilisation
- 10% raw material price rise
- 2-3% price hike March
- 5-6% potential further hike
- aftermarket 51% revenue
- OEM 30%
- exports 19%
- FY26 revenue Rs 15,000 crore
- revenue up 18% YoY
- net profit Rs 697 crore up 47%
- PV wholesales up 27% YoY April
- 17% domestic PV tyre market share
- MRF 30%
- Apollo 20%
- exports to rise to 24%
Why this matters
The Camso acquisition lifting exports to 24% is strategically timely for diversifying away from collapsed West Asia demand, reshaping CEAT's geographic exposure amid the conflict.
What to watch
- Hormuz strait shipping/insurance rate movements and reopening signals
- Crude oil and synthetic/natural rubber price trajectory
- CEAT export mix progression toward 24% target post-Camso
- Domestic replacement demand absorbing redirected volumes
- Peer commentary (Apollo, MRF, JK Tyre) on West Asia exposure
- Implement further 5-6% price hikes to defend gross margin against crude-linked input costs
- Accelerate Camso integration to diversify export footprint away from West Asia exposure
- Reallocate the 90% capacity output toward domestic replacement and OEM demand
- Guide cautiously on FY27 to manage Street expectations after the 47% profit jump