Ceat has recently acquired the Camso brand from Michelin for $225 million. Camso is focused on the construction of compact tyres and tracks with an estimated revenue run rate of $130-150 million, at 50% utilisation. It has an addressable market of $2 billion. But how is it likely to impact the company’s earnings? There are some near-term concerns, but most agree on the long-term positives.
Here is how key brokerages expect the deal to impact Ceat –
Motilal Oswal on Ceat: Deal will bolster international business
Motilal Oswal maintained its ‘Buy’ rating on Ceat, with a target price of Rs 4,393, implying an upside of 31% for the Ceat share price. The brokerage stated that the acquisition of Camso will help further bolster its presence in the global OHT (outside regular highways and city roads) segment. Following the integration of Camso, the international business contribution will rise to 25% from 19% currently.
Ceat’s consolidated capex for FY26 is expected to be around Rs 1,000 crore. The company has also paid Rs 1,200 crore towards the Camso acquisition and paid out dividends in the second quarter. Its net debt stands at Rs 1,800 crore as of June-end, with net debt to EBITDA at 1.25x.
Further, Motilal Oswal said that the replacement segment is expected to remain the key growth driver. In OEMs, the outlook appears healthy for two-wheelers and tractors, with a pick-up anticipated in the TBR (truck and bus radial) segment.
Nomura on Ceat: Camso acquisition a long-term positive
Nomura has a ‘Buy’ on Ceat with a price target of Rs 4,037. This implies upside potential of 20%. They expect Camso benefits to be visible by FY27-FY28. The focus on integration challenges in the near-term and potential long-term impact is seen as a key monitorable.
As per Nomura’s estimates, Camso will contribute 8% to Ceat’s FY27 consolidated financials. However, Nomura sees some downside risk during the integration phase. However, following the GST cut, Ceat remains a potential key beneficiary of the expected demand uptick in passenger vehicles and two-wheelers. Additionally, Nomura outlines that the high replacement exposure is a key margin tailwind for the tyre maker.
JM Financial on Ceat: Cuts earnings estimate by 12%
JM Financial maintains a ‘Buy’ rating on Ceat, with a target price of Rs 3,800. This implies an upside of 13.4% from current levels for Ceat. However, the brokerage cut the earnings per share (EPS) estimates by 12% for FY26 and 8% for FY27. This is a result of the delay in the accounting of Camso’s revenue and margin recognition.
Ceat has announced the completion of the CAMSO acquisition, effective September 2025, gaining access to an installed capacity of 250 MT/day (split equally between tyres and rubber tracks), with current utilisation levels at 50%.
From Q2 FY26, the consolidated results will include Camso’s financials. The newly acquired company’s current revenue run-rate is $130-150 million, though turnover recognised will remain lower over the next 3-4 quarters till direct customer relationships are established.
Also, Ceat’s margins are likely to remain muted for the next 6 quarters until upstream equipment becomes fully operational (targets high-teens to 20% EBITDA margin by FY28).
However, JM Financial thinks that Ceat is well-positioned to benefit because of its leadership in 2Ws and significant presence in other segments after GST was reduced from 28% to 18% on tyres.