Hold Ceat, target price Rs 1271: ICICI Securities

ICICI Securities has hold call on Ceat with a target price of Rs 1271. The current market price of Ceat Ltd. is Rs 1229.8.
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 5015.61 Crore) operating in Tyres sector.


Ceat Ltd. key Products/Revenue Segments include Automobile Tubes, Other Operating Revenue, Scrap, Royalty Income, Others for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 2821.14 Crore, up 8.70 % from last quarter Total Income of Rs 2595.28 Crore and up 47.68 % from last year same quarter Total Income of Rs 1910.28 Crore. Company reported net profit after tax of Rs 2.60 Crore in latest quarter.

Investment Rationale
In terms of profitability, the brokerage believes RM basket pressures are likely to persist till the end of H1FY23. In light of the 33% rally in last 1 month, amidst declining crude price, it downgrades the stock to HOLD from Buy with DCF-based TP of Rs1,271 (earlier: Rs1,294), implying ~12x FY24E earnings.

Promoter/FII Holdings
Promoters held 47.21 per cent stake in the company as of 30-Jun-2022, while FIIs owned 22.45 per cent, DIIs 11.15 per cent.