Stock To Buy: Midcap Tyre Stock Rallied 2.55%, Motilal Oswal Placed "Buy", Sees 32% Returns

CEAT's Stock Performance and Outlook

The last traded share price of CEAT is Rs 1,418.90 apiece. Stock rallied 2.55% compared to its previous close of Rs 1,383.60 apiece. The stock's 52 week low is Rs 890 apiece and 52 week high is Rs 1,981 apiece.

The stock has continuously fallen in the past 3 months. It gave 3.72% negative return in 1 week, 7.14% in 1 month and 23.57% in 3 months, respectively. However, it has given a positive return of 45.22% in 3 years and 38.94% in 3 years, respectively. It has fallen 10.09% in 5 years.

Buy for a target price of Rs 1,860 apiece

According to the brokerage, Cyclical recovery in both OEMs and replacement will enable faster absorption of new capacities and drive the benefit of operating leverage. This, coupled with softening RM prices, would help a partial recovery in margins in FY23 with full recovery expected in FY24. The company continues to focus on key strategic areas such as i) PV/2W/OHT (to help margins), ii) expansion in international markets and iii) increasing business in EVs. This, along with prudent capex plans (to benefit FCF), should be a long-term growth catalyst for the company. "Valuations at 11.6x/9.2x FY24E/FY25E consolidated EPS do not fully capture the benefits of new capacities and softening RM costs. We reiterate our BUY rating with a TP of INR1,860 (based on ~13x Dec-24 EPS)," Motilal Oswal said.

Disclaimer

The stock has been picked from the brokerage report of Motilal Oswal. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.