Buy CEAT, target price Rs 1317: Motilal Oswal

Motilal Oswal Financial Services has buy call on Ceat with a target price of Rs 1317. The current market price of Ceat Ltd. is Rs 1123.55.

Ceat Ltd., incorporated in the year 1958, is a Mid Cap company (having a market cap of Rs 4592.10 Crore) operating in Tyres sector.

Financials
For the quarter ended 30-09-2020, the company reported a Consolidated sales of Rs 1978.47 Crore, up 76.62 % from last quarter Sales of Rs 1120.16 Crore and up 16.96 % from last year same quarter Sales of Rs 1691.55 Crore Company has reported net profit after tax of Rs 168.87 Crore in latest quarter.


Investment Rationale
Valuations at 13.2x/11.8x FY21/22E consol. EPS does not fully capture the benefit of substantial capacity addition. It maintains Buy with TP of INR1,317.

Promoter/FII Holdings
Promoters held 46.8 per cent stake in the company as of Sept 30, 2020, while FIIs held 23.7 per cent, DIIs 16.2 per cent and public and other 13.3 per cent.