Buy Ceat, target price Rs 1270: Centrum Broking

Centrum Broking has buy call on Ceat with a target price of Rs 1270. The current market price of Ceat Ltd. is Rs 1156.2.
Time period given by analyst is one year when Ceat Ltd. price can reach defined target.

Ceat Ltd., incorporated in the year 1958, is a Mid Cap company (having a market cap of Rs 4667.74 Crore) operating in Tyres sector.


Ceat Ltd. key Products/Revenue Segments include Automobile Tubes, Scrap, Other Operating Revenue, Royalty Income, Others for the year ending 31-Mar-2021.


Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 2454.52 Crore, up 28.49 % from last quarter Total Income of Rs 1910.28 Crore and up 23.83 % from last year same quarter Total Income of Rs 1982.24 Crore. Company reported net profit after tax of Rs 37.09 Crore in latest quarter.

Investment Rationale
The brokerage expects 6% QoQ revenue growth on better CV and PV segment growth in the quarter. Company took price hike in the quarter to pass on input costs. However, the brokerage expects cost under-recovery and adverse mix to impact margins.

Promoter/FII Holdings
Promoters held 46.82 per cent stake in the company as of 30-Sep-2021, while FIIs owned 23.42 per cent, DIIs 13.23 per cent.