Buy Ceat, target price Rs 1575: Motilal Oswal

Buy Ceat, target price Rs 1575:  Motilal Oswal

Motilal Oswal has buy call on Ceat with a target price of Rs 1575. The current market price of Ceat Ltd. is Rs 1388.

Ceat Ltd., incorporated in the year 1958, is a Mid Cap company (having a market cap of Rs 5476.94 Crore) operating in Tyres sector.

For the quarter ended 31-12-2020, the company reported a Consolidated sales of Rs 2221.25 Crore, up 12.27 % from last quarter Sales of Rs 1978.47 Crore and up 26.08 % from last year same quarter Sales of Rs 1761.77 Crore Company reported net profit after tax of Rs 120.64 Crore in latest quarter.

Investment Rationale
Valuations at 13.2x/11.6x FY21E/22E consolidated EPS does not fully capture the benefit of substantial capacity addition. Maintain Buy with a TP of ~INR1,575 per share

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 others 13.3 per cent.

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