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Informist, Thursday, Sept. 10, 2026

 

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--CEAT CFO: Camso performance in Jul-Sept likely to be better than Apr-Jun
--CONTEXT: Comments by CEAT CFO Kumar Subbiah to Informist
--CEAT CFO: Expect Camso to perform better in FY28 compared with FY27
--CEAT CFO: Camso has to scale up, volumes so far below our expectations
--CEAT CFO: Expect to service all Camso customers directly by Oct-Nov
--CEAT CFO: Camso earnings to improve once co starts servicing all customers
--CEAT CFO: US market not big focus due to profitability issue
 

 

By Anand JC and Anshul Choudhary

 

MUMBAI – CEAT Ltd. expects the Camso business to deliver better performance once the company starts servicing almost all of Camso's customers directly by the end of September, Chief Financial Officer Kumar Subbiah told Informist in an interview. Subbiah acknowledged that Camso's performance has been below CEAT's expectations so far but was hopeful of subsequent quarters being better as the company focuses on scaling up the business.

 

Currently, part of the product realisations goes to cover various costs and a marginal profit goes to the Michelin Group. CEAT had acquired Michelin Group's Camso off-highway tyres and tracks business in September last year.

 

"Camso's performance has been a little below our expectations on the volume. Servicing would be our responsibility soon," Subbiah said. He expects CEAT to service 90% of Camso's customers by the end of this month, increasing the reach from 60% at the end of June. "Now we are dependent on Michelin to sell, soon we don't have to (be dependent)," Subbiah said. He was confident of Camso's financials improving once CEAT takes direct control of selling Camso products.

 

"Camso has to scale up. It is still below our original business plan," he said. Subbiah expects Camso to perform better in the September quarter than in the June quarter. Further, he expects the financial year 2027-28 (Apr-Mar) to be better for Camso than FY27.

 

Given that CEAT will service over 90% of Camso's sales from September, it has been incurring costs towards warehousing and staffing in Germany, Poland, France, and the US. By Oct-Nov, the company hopes to service all of Camso's customers.

 

CEAT expects to be dependent on Michelin for compounding and calendaring till the June quarter. These are stages in the manufacture of tyres and rubber, where rubber is mixed and then rolled into precise, reinforced sheets. An upstream equipment is also under installation. Once these things are through, CEAT would not rely on Michelin and would manage operations from an "end-to-end" standpoint, Subbiah said.

 

FUTURE PLANS

The tyremaker plans to grow Camso's operations. "For us to grow in that business, it's important to develop products and continue our work with OEMs (original equipment manufacturers)," the chief financial officer said. "In India, OEM margins are low. There, margins are healthy."

 

CEAT currently has the right to use the Camso brand name for specific products such as compact construction equipment tyres and tracks. Legally, the company will gain control of the Camso brand name only after two more years. Camso is a market leader in categories such as material handling, agriculture, and power sports products, which are adjacencies for tyres and tracks. "Two years later, we will have the freedom to use the brand wherever we think is appropriate. If Camso is considered among top two in all of these categories, there will be a rub-off effect (on its local operations)," Subbiah said.

 

CEAT has drawn up a plan to earn a third of its consolidated revenues from the international business in the next five years, up from around 25% currently. Subbiah said this will be purely from the company's sales and not necessarily from acquisitions. "In the 33% plan, we have not built any inorganic (growth)," he said.

 

The company is prioritising the capability to develop higher-end tyres and capacities as it goes big on international business. Europe is a major market for CEAT. Here, the company has seen strong traction in passenger car tyres. "I think what needs to improve is in terms of capacity being available for that market as much as our business would need," he said.

 

The US market contributes under 5% to CEAT's export share. Subbiah said the company does not find exporting to the US profitable because it was not able to fully pass on the impact of the Trump administration's tariffs. "US to that extent has certain bit of challenges. Not necessarily on the tariff side, overall on the profitability point of view," he said.

 

In the US, CEAT wants to focus on specific categories such as farm radial or Camso-branded tyres. "We are not too worried about the US market at this point in time because we are trying to de-risk to some extent in terms of not over-focusing with respect to our normal passenger and truck tyres," Subbiah said. At 0945 IST, shares of CEAT traded largely flat at INR 3,295.00 on the National Stock Exchange.  End

 

Edited by Akul Nishant Akhoury 

 

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