Buy Ceat, target price Rs 1700: Motilal Oswal

Motilal Oswal has buy call on Ceat with a target price of Rs 1700. The current market price of Ceat Ltd. is Rs 1303.7.
Ceat Ltd., incorporated in the year 1958, is a Mid Cap company (having a market cap of Rs 5318.18 Crore) operating in Tyres sector.

Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 2292.89 Crore, up 3.04 % from last quarter Total Income of Rs 2225.30 Crore and up 45.40 % from last year same quarter Total Income of Rs 1576.92 Crore. Company reported net profit after tax of Rs 145.20 Crore in latest quarter.


Investment Rationale
The brokerage cuts FY22E/FY23E EPS by ~31%/6% to factor in near term impact from the second COVID wave and RM cost inflation

Promoter/FII Holdings
Promoters held 46.8 per cent stake in the company as of March 31, 2021, while FIIs held 27 per cent, DIIs 13.7 per cent and public and others 12.6 per cent.