Ceat Ltd
Stock Snapshot
Price Performance
Vista Outlook
Basis of our Recommendation
CEAT Ltd. is currently navigating a complex operating environment characterized by robust volume growth and premiumization efforts, offset by significant input-cost headwinds. Management's focus on integrating the Camso business is pivotal for long-term growth, as it aims to shift towards higher-value segments. Despite recent margin compression due to elevated raw material prices, the company has demonstrated pricing power in the replacement segment, implementing an 11% price increase to protect margins. Vista's financial outlook reflects moderated revenue growth and ongoing margin pressures, with a fair valuation aligned with intrinsic value. The expected upside is constrained by rising costs and geopolitical uncertainties affecting supply chains. Over the next 12-24 months, key opportunities include market share gains and successful Camso integration, while watchpoints involve sustained raw material price volatility and potential demand softening in the replacement market due to pricing actions
Why We Like This Stock
- Successful integration of the Camso business is expected to enhance CEAT's market position in higher-value segments
- Management's proactive pricing strategies are aimed at mitigating margin pressures from rising raw material costs
- Strong demand in both domestic and international markets supports potential revenue growth
Things To Watch Out For
- Ongoing raw material price inflation poses a significant threat to profitability and margin stability
- Geopolitical tensions may create uncertainties in supply chains, impacting operational efficiency
- The need for price hikes in the replacement market could dampen demand and affect revenue growth
Key Parameters
Financial Snapshot
View Technicals Analysis →| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 11,943 | 13,218 | 15,678 | 16,556 | 18,062 |
| Profit Before Tax (Cr.) | 915 | 674 | 1,031 | 845 | 1,031 |
| PBT Margin | 7.7% | 5.1% | 6.6% | 5.1% | 5.7% |
| Net Profit (Cr.) | 742 | 551 | 838 | 679 | 827 |
| Earnings Per Share | 184.8 | 136.3 | 207.1 | 167.4 | 204.3 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| Moneycontrol | ► Equalweight | nan | 26-Aug-2026 |
| ICICI Securities | ▲ Buy | 4,300 | 20-Jul-2026 |
| Kotak Securities | ▼ Reduce | 3,350 | 20-Jul-2026 |
| Nomura | ▲ Buy | 4,266 | 20-Jul-2026 |
| Motilal Oswal | ▲ Buy | 4,228 | 17-Jul-2026 |
| Elara Capital | ▲ Buy | 228 | 07-May-2026 |
| Anand Rathi | ► Add | 3,850 | 30-Apr-2026 |
| Emkay Global | ▼ Reduce | 3,600 | 30-Apr-2026 |
Company Overview
Show Company Profile
CEAT Limited manufactures automotive tyres, tubes, and flaps in India and internationally. The company offers a range of tyres for rubber tires and tubes for scooters, bikes, two and three wheelers, cars, buses, LCVs, trucks, and tractors, as well as agricultural and industrial radial tyres. It also exports its products. The company was formerly known as CEAT Tyres of India Limited and changed its name to CEAT Limited in 1990. The company was founded in 1924 and is headquartered in Mumbai, India. CEAT Limited operates as a subsidiary of RPG Enterprises Limited.