CEATLTD - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.3

📊 Core Financials

Earnings Performance: EPS of ₹116 and quarterly PAT of ₹138 Cr (slightly down from ₹128 Cr) show consistent profitability, though recent growth dipped by 4.11%.

Return Metrics: ROCE at 15.8% and ROE at 12.2% are decent, though not industry-leading.

Debt Profile: Debt-to-equity of 0.50 is moderate—manageable but worth monitoring in a cyclical industry.

Cash Flow: Not explicitly stated, but consistent EPS and moderate debt suggest stable operating cash flows.

💰 Valuation Indicators

Metric Value Insight

P/E Ratio 27.9 Below industry average (33.2) — attractive

P/B Ratio ~3.24 Reasonable for a manufacturing firm

PEG Ratio 0.29 Extremely undervalued relative to growth

Dividend Yield 0.87% Modest, not a major income play

The PEG ratio is particularly compelling, suggesting strong earnings growth at a discounted valuation.

🏭 Business Model & Competitive Advantage

CEAT Ltd. is a leading tyre manufacturer serving OEMs and retail customers across India and globally. Its strengths include

Broad product portfolio across segments (passenger, commercial, two-wheeler)

Strong brand recognition and distribution network

Innovation in radial and specialty tyres

Backed by RPG Group, adding credibility and strategic depth

The company has delivered a 32% CAGR in share price over five years, closely tracking its EPS growth of 30% annually

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—a sign of healthy market sentiment and execution.

📈 Technical & Sentiment Indicators

RSI: 59.0 – Neutral, nearing overbought territory.

MACD: 30.2 – Bullish momentum.

Volume Dip – Below weekly average, indicating short-term cooling.

DMA 50 & 200: Current price is above both, signaling strength.

💡 Investment Strategy

🔽 Entry Zone

Ideal Buy Range: ₹3,200–₹3,300, near DMA 200 and below current price.

Current Price ₹3,433: Slightly above fair entry, but not overpriced.

🕰️ Long-Term Holding

Strong Buy on Dips: PEG ratio and historical TSR of 307% over five years

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make it a compelling long-term compounder.

Hold if already invested: Fundamentals and valuation support continued upside.

Let me know if you’d like a discounted cash flow model or comparison with other tyre manufacturers like MRF or Apollo Tyres.

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