Hold CEAT: target of Rs 3750: ICICI Securities

Hold

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26 Aug, 2025 12:21

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ICICI Securities's research report on CEAT

Healthy traction in the OE business and steady replacement demand (led by 2W/TBR segment) drove growth for CEAT in Q1FY26. Demand outlook remains positive with the 2W segment likely to grow in double-digit and TBR/PCR in high single-digit in FY26. With demand bottoming out in key international markets, the outlook for exports also remains positive. US-tariffs may have an impact on CAMSO’s performance in the near term. Nonetheless, its medium-to-long term prospects remain healthy and we expect it to be EPS accretive from FY28E. We cut FY26/FY27 revenue estimate by 4%/2% owing to a lower-than-expected revenue run-rate for CAMSO (and delay in consolidation by 2–3 months). Valuations remain rich.

Outlook

Maintain HOLD with TP of INR 3,750 (earlier: INR 3,625) based on 17x FY27E EPS (earlier 16x).

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