Buy CEAT; target of Rs 4393: Motilal Oswal

Motilal Oswal's research report on CEAT

CEAT’s Q1FY26 earnings stood at INR1.15b, below our estimate of INR1.5b, impacted by lower-than-expected margins, higher interest costs, and lower other income. The company, however, continues to outperform in its key segments. Margins are expected to improve from Q2 as the benefits of softening input costs are likely to be visible. CEAT’s focus on strategic areas such as PVs/2Ws/OHT/exports (to support margins), coupled with prudent capex plans (to benefit FCF), is expected to drive improved returns in the long run. We reiterate our BUY rating on the stock with a TP of INR4,393 (based on ~18x June27E EPS).

Outlook

CEAT’s focus on strategic areas such as PVs/2Ws/OHT/exports (to support margins), coupled with prudent capex plans (to benefit FCF), is expected to drive improved returns in the long run. We reiterate our BUY rating on the stock with a TP of INR4,393 (based on ~18x June27E EPS).