Motilal Oswal's research report on CEAT
Ceat Ltd (CEAT)’s 2QFY25 performance was impacted by higher RM costs, leading to a 100bp contraction in operating margins QoQ, which stood at 11% (est. 11.5%). The outlook for replacement segment across categories and exports remains healthy, with a recovery expected in the OEM segment in H2. CEAT’s focus on strategic areas such as PVs/2Ws/OHT/exports (to help margins), along with prudent capex plans (to benefit FCF), should continue to improve its returns in the long run. Valuations at 22.5x/16.8x FY25E/FY26E consol. EPS appear reasonable. We reiterate our BUY rating on the stock with a TP of INR3,450 (based on ~17x Sep’26E EPS).
Outlook
Valuations at 22.5x/16.8x FY25E/FY26E consol. EPS appear reasonable. We reiterate our BUY rating on the stock with a TP of INR3,450 (based on ~17x Sep’26E EPS).
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