Accumulate CEAT; target of Rs 1766: KR Choksey

KR Choksey's research report onCEAT

CEAT Ltd, a part of the RPG group and is one of the leading manufacturer of automobile tyres for CV, 2/3 wheeler, PC and UV segments with over 50 years of presence in India. The company offers the widest range of tyres to leading Original Equipment Manufacturers across the world and is highly present in replacement market.

Outlook

At CMP of INR 1,588 the stock is trading at 17.8x FY17 EPS of INR 89.3, 16.6x FY18E EPS of INR 95.3 and 13.5x FY19E EPS of INR 117.7. We recommend “ACCUMULATE” rating on the stock and value the stock at 15x FY19E EPS of INR 117.7 with a target price of INR 1,766 indicating 11.2% upside from CMP.

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