• Raw material inflation: CEAT faces a 20% to 22% surge in raw material costs, which will pressure Q1 margins despite a 6% to 7% price increase taken across April and May. An additional 5% to 6% price hike is planned through June and July across replacement, OEM, and international markets to pass through costs.
• Middle East disruption: Sales to the Middle East, which represent about 15% of exports, dropped near zero starting in late March and are expected to remain flat in Q1 due to geopolitical tensions. Management expects Middle East sales to normalize by Q2 if conflict subsides, while strong demand in the US, Europe, and Latin America continues to support overall export growth.
• Revenue growth outlook: Management is targeting double-digit growth in Q1 driven by favorable summer seasonality across segments, following a 15% full-year growth last year. However, cumulative price hikes of 10% to 15% through Q2 are expected to cause some demand moderation.
• International business share: International revenue represents 23% to 24% of total revenue following the Camso acquisition, up from 19%. Management aims to increase this higher-margin international share to at least 33% over the next 3 to 5 years.