Prabhudas Lilladher's research report on CEAT
We visited CEAT plant in Chennai that manufactures passenger vehicle (PV) tyres, motorcycle tyres and trucks & buses tyres. It is a greenfield plant which has technological & digital capabilities and has delivered ~200 SKUs over last 2 years. In PV it has ~17 products in its portfolio catering to domestic as well as international markets. Its current capacity for passenger car is at 20k per day and going ahead aims to increase capacity to ~28.5k per day. We believe CEAT shall benefit from strong OEM volume growth in 2 wheeler category while gradual recovery in replacement demand and expansion in international markets could further aid volume and margin expansion.
Outlook
The stock is trading at PE of 16.1x/14.5x FY25/FY26, near historical levels. Maintain ‘Accumulate’ rating with TP of Rs 2,980 at 15x Mar-26E consol. EPS.
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