CEAT Ltd., a flagship company of the RPG Group, continues to impress with solid fundamentals, aggressive expansion, and a clear long-term strategy. Below is a deep dive into its financial growth, order book, valuation, technicals, and market outlook as of FY24 and Q1 FY25.
📊 1. Company Growth & Financial Performance
| Metric | FY24 | YoY Growth | Q1 FY25 | YoY Growth | QoQ Growth |
|---|---|---|---|---|---|
| Revenue | ₹11,943.5 Cr | +5.56% | ₹3,420.6 Cr | +14.3% | +3.7% |
| Net Profit | ₹614.5 Cr | +252.8% | ₹93.2 Cr | -8.4% | -20.3% |
| EBITDA | ₹1,673.0 Cr | +70.4% | ₹367.9 Cr | +8.2% | +3.5% |
📈 Key Highlights (FY20–FY24 CAGR Trends)
| Year | Revenue (₹ Cr) | EBITDA (₹ Cr) | Net Profit (₹ Cr) |
|---|---|---|---|
| FY20 | 6,778.8 | 678.0 | 212.8 |
| FY21 | 7,609.6 | 856.0 | 396.0 |
| FY22 | 9,363.4 | 720.0 | 41.8 |
| FY23 | 11,314.9 | 982.0 | 174.2 |
| FY24 | 11,943.5 | 1,673.0 | 614.5 |
✅ 5-Year CAGR (Revenue): ~12%
✅ EBITDA Margin (FY24): 14% vs 8.7% in FY23}
🛒 2. Order Book & Expansion Strategy
📦 Current Order Book: ₹4,500–₹5,000 Cr
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Fueled by robust OEM contracts and export orders
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Growing at ~10% CAGR
🧩 Business Diversification
New Verticals:
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🚜 Specialty Tyres for agriculture and off-road vehicles
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🌱 Eco-friendly Tyres under “SecuraDrive” range
Regional Expansion:
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🇮🇳 Chennai plant added 20% capacity (Passenger Radials)
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🌍 Global footprint in 100+ countries; export growth ~15% YoY
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🇧🇩 JV in Bangladesh: CEAT AKKHAN Ltd. (70:30)
🏭 Capacity & Capex
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Daily production: 800+ tonnes
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FY24–25 Capex: ₹1,000 Cr for scale-up
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FY24 cash flow from operations: ₹1,200 Cr
📅 3. Future Projections (FY25–FY26)
| Metric | FY24 Actual | FY26 Projection | CAGR |
|---|---|---|---|
| Revenue | ₹11,943.5 Cr | ₹13,500 Cr | ~6–7% |
| Net Profit | ₹614.5 Cr | ₹750–800 Cr | |
| EPS | ₹158.9 | ₹190–200 |
🧠 Innovation & Partnerships
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🤝 Ties with Volkswagen, Skoda for premium tyres
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📡 Development of smart tyres (IoT sensor integration)
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🧪 New specialty tyre plant in Maharashtra (by 2026)
💰 4. Debt, Cash Flows & Financial Health
| Metric | FY23 | FY24 / Q1 FY25 |
|---|---|---|
| Total Debt | ₹2,170 Cr | ₹1,890 Cr |
| Debt-to-Equity | 0.61 | 0.40 |
| Operating Cash Flow | ₹616 Cr | ₹1,200 Cr (FY24) |
| Free Cash Flow (FCF) | ₹300 Cr |
✅ ₹280 Cr debt repaid in FY24
✅ Target: ₹500 Cr debt reduction by FY26
✅ No EPS dilution expected
🌍 5. Market Size & Strategic Opportunities
| Market | TAM Size | CEAT Share |
|---|---|---|
| 🇮🇳 India | ₹50,000 Cr | ~8% |
| 🌐 Global | ₹2,50,000 Cr | ~2% |
📌 Growth Drivers
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🚘 Premiumization: PCR and high-performance tyres
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⚡ EV-specific tyres: tapping into India’s EV growth
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🌏 Export expansion: 15–20% growth potential in Europe/ASEAN
⚠️ Risks
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📉 Raw material price volatility (rubber, crude)
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🏁 Competition from Apollo, MRF, Michelin
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🌐 Macro risks: OEM demand could slow in downturns
📜 6. Regulatory & Market Sentiment
| Factor | Status / Value |
|---|---|
| SEBI/ASM Listing | ❌ No active scrutiny |
| Share Price (Apr 2025) | ₹3,060.4 |
| 52-Week Range | ₹2,210.2 – ₹3,578.8 |
| Promoter Holding (RPG) | 47.2% (No pledging) |
| FII Holding | 15.3% (↓ from 18.8%) |
| DII Holding | 21.5% (↑ from 17.1%) |
💹 INR depreciation (₹85/USD) hurts input costs but boosts exports
📉 FII outflows of ₹10,000 Cr have pressured midcaps recently
📉 7. Technical Analysis (April 2025)
| Indicator | Value / Signal |
|---|---|
| RSI | 55 (Neutral) |
| MACD | Bullish crossover |
| Bollinger Band | Near upper band (volatility) |
🔍 Key Levels
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Support: ₹2,800 and ₹2,500
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Resistance: ₹3,300 and ₹3,600
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Long-Term Target: ₹4,500–₹5,000
📌 Price near 50-month EMA = ₹2,950: Indicates consolidation
📈 Breakout above ₹3,300 could lead to fresh highs
📊 8. Valuation & Investment Outlook
| Metric | CEAT | Industry Avg |
|---|---|---|
| P/E | 20.98 | 25 |
| P/B | 2.49 | 3 |
| PEG | 0.8 | 1+ |
✅ Fairly valued with upside
✅ PEG < 1 indicates undervaluation based on growth
📈 Investment Strategy
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Short-Term: Hold or buy on dips near ₹2,800
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Medium-Term: Target ₹3,500–₹3,800
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Long-Term: Buy for ₹4,500–₹5,000 (2–3 years)
❓ Top 10 FAQs on CEAT Ltd. (Updated for FY25)
1. What is CEAT Ltd.’s revenue and profit growth in FY24?
CEAT reported a 5.56% YoY revenue growth to ₹11,943.5 Cr and a massive 252.8% increase in net profit to ₹614.5 Cr in FY24, driven by better operating margins and premium tyre sales.
2. Why did CEAT’s net profit decline in Q1 FY25 despite revenue growth?
Although Q1 FY25 revenue rose 14.3% YoY, net profit fell 8.4% due to higher raw material costs (especially rubber and crude-linked inputs), impacting margins.
3. What is CEAT’s current order book size and growth trend?
As of Q1 FY25, CEAT has an estimated order book of ₹4,500–₹5,000 Cr, growing at a 10% CAGR over the last three years, supported by OEM and export demand.
4. Is CEAT expanding into electric vehicle (EV) or smart tyre segments?
Yes, CEAT is investing in EV-specific tyres and developing smart tyres with IoT-enabled sensors, aligning with trends in connected and sustainable mobility.
5. What is CEAT’s debt situation as of FY25?
CEAT has reduced total debt to ₹1,890 Cr and improved its debt-to-equity ratio to 0.40, reflecting strong cash flows and a disciplined deleveraging strategy.
6. Is CEAT stock undervalued or overvalued right now?
With a P/E of 20.98, P/B of 2.49, and PEG ratio of 0.8, CEAT is considered undervalued relative to its earnings growth, making it attractive for long-term investors.
7. What are the technical support and resistance levels for CEAT stock?
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Support levels: ₹2,800 and ₹2,500
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Resistance levels: ₹3,300 and ₹3,600
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Current price (~₹3,060) is near neutral territory with upside potential on breakout.
8. How is CEAT’s international presence shaping up?
CEAT exports to 100+ countries, with strong growth in Europe and Southeast Asia, and has a 70:30 JV in Bangladesh to serve local demand.
9. What are the key risks to CEAT’s business in 2025?
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Raw material cost volatility (rubber, crude oil)
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Competition from players like MRF, Apollo, Michelin
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Macroeconomic risks affecting OEM demand
10. Is CEAT under any regulatory watch or SEBI scrutiny?
No. As of April 2025, CEAT is fully compliant with SEBI norms and is not under ASM or any regulatory investigation, ensuring a stable operating environment.
📌 Conclusion: Should You Invest in CEAT Ltd.?
CEAT Ltd. combines strong fundamentals, a growing order book, and strategic international expansion with a fairly valued stock price.
✅ Strengths:
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Robust cash flows & low debt
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Smart tyre & EV readiness
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Long-term CAGR in double digits
⚠️ Risks:
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Input cost volatility
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Global slowdown effects on OEM demand
🎯 Recommendation:
✔️ Accumulate on dips for medium to long-term holding
✔️ Set stop-loss near ₹2,700
