27 - 05 - 2026

Camso to be a $1 billion opportunity post brand migration by FY28

Camso will emerge as a $1 billion opportunity post brand migration in the first half of financial year 2028 (1HFY28) for tyre manufacturer CEAT, following its acquisition from the Michelin Group.

The transaction opens up about $850 million addressable market opportunity for CEAT, where it will directly compete with Michelin, brokerage firm Motilal Oswal said in a report.

Integration activities for the first phase of the acquisition are currently underway. The next phase, extending through the second half of financial year 2027 (2HFY27), will focus on complete value chain integration, including mixer calendar installation to achieve 100 per cent manufacturing control. The brand transition to CEAT will conclude by 1HFY28, before operations scale up in 2HFY28.

Management plans to double production capacity by financial year 2028 (FY28), with margin accretion from the off-highway tyre (OHT) business expected from FY28 to financial year 2029 (FY29) onwards. Management guided that, “once operations at Camso stabilise post 2028, margins are expected to be in the 20-25 per cent range.”

To achieve the $1 billion target, management highlighted multiple incremental growth avenues from FY28 onwards beyond the immediate Michelin market. These plans include scaling the off-the-road (OTR) business from about $250 million to $260 million up to $500 million, alongside a $100 million opportunity in agricultural tracks, a $50 million to $100 million expansion across solids, material handling, and exports, and a $150 million opportunity from the Camso radial portfolio.

Camso aims to regain its compact construction tracks market share to about 40 per cent over the next four to five years, recovering from a decline to about 20 per cent from historical levels of 45 per cent. Management noted that Michelin has no meaningful presence in agricultural tracks, positioning Camso to gain share in that segment.

The business will remain predominantly international, focusing strategically on the United States and Europe, with selective exposure to Latin America and limited domestic participation. Complete customer transition from Michelin is scheduled to conclude by October 2026.

Sri Lankan operations

Camso generated about $125 million in revenue in calendar year 2025 (CY25). Under Michelin’s ownership, price increases led to volume declines, and new original equipment manufacturer (OEM) programmes were curtailed ahead of the divestment. CEAT management believes revenue from the Sri Lankan operations alone could scale to $275 million or $300 million if factory utilisation increases to the 95-100 per cent range.

The company is currently engaging with two OEMs for agricultural radial tyres, though no orders have been secured yet.

Management clarified it will avoid a dual-brand strategy where CEAT fills gaps vacated by Camso, opting instead to evaluate cross-selling opportunities to prevent brand dilution.

Operations in Sri Lanka experienced temporary production disruptions during the fourth quarter of financial year 2026 (4QFY26) due to local fuel shortages.

CEAT had entered into a definitive agreement to acquire the Camso brand’s off-highway construction equipment bias tyre and tracks business from the Michelin Group in December 6, 2024, for an all-cash deal valued at $225 million (₹1,900 crore). The deal, completed in September 2025, gave CEAT two manufacturing facilities in Sri Lanka and global ownership rights to the Camso brand following an initial three-year licensing period.

Under the transaction structure, CEAT acquired about $150 million compact construction tracks business through its Sri Lanka operations, while Michelin retained the remaining approximately $850 million business under its own brand.