I-Sec downgrades Ceat to Hold, target price at Rs 3,625

ICICI Securities has downgraded Ceat to Hold from Add with a target price of Rs 3625. The current market price of Ceat is Rs 3686.95. Ceat, incorporated in 1958, is a Mid Cap company with a market cap of Rs 14646.17 crore, operating in the Tyres sector.

Ceat's key products/revenue segments include Automobile Tubes, Other Operating Revenue, Scrap, Others, Royalty Income for the year ending 31-Mar-2024.

Financials
For the quarter ended 31-03-2025, the company has reported a Consolidated Total Income of Rs 3425.14 crore, up 3.69% from last quarter Total Income of Rs 3303.33 crore and up 14.36% from last year same quarter Total Income of Rs 2994.92 crore. The company has reported net profit after tax of Rs 93.24 crore in the latest quarter.

The company's top management includes Mr.H V Goenka, Mr.Anant Vardhan Goenka, Mr.Arnab Banerjee, Mr.Paras K Chowdhary, Mr.Pierre E Cohade, Mr.Atul C Choksey, Ms.Daisy Chittilapilly, Mr.Haigreve Khaitan, Mr.Mahesh S Gupta, Mr.Milind Sarwate, Ms.Priya Nair, Mr.Ranjit V Pandit, Ms.Sukanya Kripalu, Mr.H V Goenka, Mr.Praveen Pardeshi, Mr.Anant Vardhan Goenka, Mr.Arnab Banerjee, Mr.Paras K Chowdhary, Mr.Pierre E Cohade, Mr.Atul C Choksey, Ms.Daisy Chittilapilly, Mr.Haigreve Khaitan, Mr.Mahesh S Gupta, Mr.Milind Sarwate, Ms.Priya Nair, Mr.Ranjit V Pandit, Ms.Sukanya Kripalu, Mr.Praveen Pardeshi. Company has BSR & Co. LLP as its auditors. As on 31-03-2025, the company has a total of 4 crore shares outstanding.

Investment Rationale
ICICI Securities recently attended CEAT's Investor Day to understand its medium-term growth strategy. Over the next two years, CEAT aims to gain leadership position in the PV replacement segment (currently, no. 3 player with 16% market share); it is also targeting ~200bps of market share expansion in the TBR segment. CAMSO?s integration is underway. Near-term focus shall be on driving growth and synergies in the OHT business. While medium-term prospects remain strong (with respect to growth/margin), we remain watchful of US-tariff related uncertainties potentially impacting growth/margins in the near term while valuations remain rich, post the stock's recent run-up (~25% in last two months). The brokerage downgrades the stock to HOLD, from Add, with a target price of Rs 3,625 (unchanged) based on 16x FY27E EPS.

Promoter/FII Holdings
Promoters held 47.21 per cent stake in the company as of 31-Mar-2025, while FIIs owned 15.28 per cent, DIIs 21.51 per cent.