CEATLTD - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

📊 Fundamental Analysis: CEAT Ltd (CEATLTD) Fundamental Rating: 4.0

🧾 Core Financials

Profitability

PAT has dropped from ₹126 Cr to ₹115 Cr ➜ Q-o-Q decline of -22.8%, but profitability remains strong.

EPS at ₹107 is impressive, reflecting solid earnings.

ROE: 11.7%, ROCE: 15.0% ➜ healthy returns, especially for the tyre manufacturing sector.

Balance Sheet Strength

Debt to equity at 0.49 ➜ moderately leveraged, manageable for a capital-intensive industry.

Book Value: ₹1,080 ➜ trading at ~3.1x book, indicating fair valuation for its asset base.

📈 Valuation Indicators

Metric Value Insights

P/E Ratio 29.6 Below industry average — moderately priced

P/B Ratio 3.1 (3,353 ₹ / 1,080 ₹) ➜ reasonable

PEG Ratio 0.37 Very attractive — indicates undervaluation relative to growth

Industry PE 33.9 Company trading below sector average

🔍 Conclusion: CEATLTD seems undervalued based on PEG ratio and sector-relative valuation.

🏭 Business Model & Market Position

CEAT Ltd manufactures and sells tyres — serving both OEMs and replacement markets.

Competitive edge: Strong brand equity, diversified product portfolio, and pan-India distribution.

Market Cap: ₹13,577 Cr — mid-cap size with upward potential.

Institutional signals

FII holding up +2.11% ➜ positive foreign sentiment.

DII holding down -1.45% ➜ could signal portfolio rebalancing.

📉 Technical Indicators

RSI: 34.7 ➜ nearing oversold territory — potential reversal zone.

MACD: -80.9 ➜ bearish momentum persists.

DMA 50: ₹3,588, DMA 200: ₹3,222 ➜ price below 50 DMA but still above 200 DMA — intermediate caution.

✅ Suggested Entry Zone: ₹3,100–₹3,250 ⏳ If further correction continues, this band offers an attractive accumulation point.

📅 Long-Term Holding Perspective

Solid fundamentals with upside on cyclical recovery and automotive demand resurgence.

PEG suggests undervaluation despite short-term profit dip — signs of strength in long-run.

Hold if

You’re comfortable with moderate volatility.

You believe in India’s automotive growth story and infrastructure expansion.

You see tire demand rising with EV and fleet replacement cycles.

Want to stack this against other tyre makers like MRF, Apollo or JK Tyre? I’d be happy to compare — just say the word!

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