Buy Ceat, target price Rs 1775: Motilal Oswal

Motilal Oswal has buy call on Ceat Ltd. with a target price of Rs 1775. The current market price of Ceat is Rs 1377.85. 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 5584.94 Crore) operating in Tyres sector.

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 1910.28 Crore, down -16.69 % from last quarter Total Income of Rs 2292.89 Crore and up 70.11 % from last year same quarter Total Income of Rs 1122.98 Crore. Company reported net profit after tax of Rs 16.05 Crore in latest quarter.


Investment Rationale
Valuations at 11.3x FY23E consolidated EPS do not capture the ramp-up in new capacities in an improving demand environment, which would lead to margin recovery.

Promoter/FII Holdings
Promoters held 46.8 per cent stake in the company as of June 30, 2021, while FIIs held 24 per cent, DIIs 13.7 per cent and public and others 15.5 per cent.