• Price hike execution: CEAT implemented cumulative price increases of 11% to 11.5% in the replacement segment and 11% to 12% with OEMs to offset Q1 raw material cost inflation of 16% to 18%. The company is rolling out an additional 2% price hike in August to progressively cover expected Q2 cost increases of 6% to 8%.
• Raw material pressure: Rubber prices remain near 20-year highs at ₹275 to ₹280 per kg locally and $2,300 to $2,320 per ton internationally due to supply and logistics delays from Southeast Asia. While the passenger vehicle segment has absorbed the resulting price hikes, management is monitoring potential demand resistance in the commercial segment.
• Camso profitability outlook: Camso is projected to reach operating EBITDA break-even by Q3 or Q4 as sales volume catches up to newly established international sales and warehouse infrastructure. The Q1 forex loss stemming from the $80 million Sri Lankan intercompany debt sat below the EBITDA line and is not expected to recur if the Sri Lankan currency stabilizes.
• Camso distribution transition: CEAT is shifting Camso sales away from the Michelin network to direct distribution, targeting 90% direct servicing by the end of September to eliminate a 25% revenue suppression. The company aims to reach monthly revenues of $10 million in Q3/Q4, with operating margins expanding toward double digits as revenue scales toward historical levels of $14 million per month.