Ceat unveils FY26 growth strategy, targets doubling export revenue

Ceat, a prominent tire manufacturer, has revealed its growth strategy for fiscal year 2026. The company aims to increase its market share in the car and truck tire segments while doubling its export revenue. Meanwhile, it seeks to maintain its leadership position in the two-wheeler tire segment.

Ceat asserts its dominance in the two-wheeler tire segment, currently holding a market share of approximately 28 per cent. Despite challenging market conditions, the company's market share has grown from about 26 per cent in FY19. Ceat plans to leverage premiumisation to further expand its share. Notably, the contribution of premium range products to its revenue has risen from 13 per cent in FY19 to around 23 per cent in FY23, according to the company's investor presentation.

The company has made significant progress in the electric vehicle (EV) sector, establishing a strong presence in the electric two-wheeler original equipment manufacturer (OEM) space. Ceat claims to hold over 40 per cent of the market share in this segment. Anant Goenka, the Vice Chairman of Ceat, highlighted the company's collaboration with leading OEMs, particularly in the two-wheeler segment, allowing them to become market leaders in the two-wheeler EV space. Ceat takes pride in being the first tire brand approved by an OEM in the commercial EV segment.

Ceat, with revenue of Rs 113.15 billion, aims to increase its market share in the two-wheeler tire space by 4 per cent. The company plans to achieve this through a stronger focus on premium motorcycles, expanding its presence in the EV sector, and improving penetration in the southern region. Additionally, Ceat intends to cater to niche segments like adventure biking and Moto GP versions. The company charges a premium of 2-3 per cent compared to its closest competitor, according to a report by Motilal Oswal Financial Services.

In the passenger vehicle tire segment, Ceat's market share has grown to about 15 per cent in FY23 from approximately 11 per cent in FY19. However, it still lags behind the market leader by 3-4 per cent. As part of its Vision FY26 plan, Ceat aims to secure a leadership position by increasing its share to 18-19 per cent. In the SUV segment, the company claims a market share of 20-25 per cent. Notably, the premium range's share has increased from 9 per cent in FY19 to 28 per cent in FY23.

Ceat currently holds a 7 per cent market share in the truck and bus radial (TBR) tire category and aims to raise it to 11-12 per cent by FY26.

Over the past four years, Ceat has experienced substantial growth in export revenues, which now amount to Rs 20 billion, equivalent to 18 per cent of its overall revenue. The company aspires to double its export revenue to Rs 40 billion by FY26. This growth will be supported by increased global demand, higher sales of off-highway tires (OHT), and further market penetration.

Ceat has a presence in 25 European countries and 14 Latin American countries. The company plans to expand into the United States, intending to launch car/SUV and TBR products by the end of FY24. Successful testing of its TBR product has already taken place.

In FY23, Ceat produced more than 45 million tires, with an average capacity utilisation of 80 per cent across all its plants. The company anticipates a capital expenditure of Rs 700-750 crore in the current fiscal year. Moreover, Ceat allocated 1.5 per cent of its turnover to research and development in FY23.