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RPG group stock zooms 56% from April low; hits all-time high today
Ceat share price today: Shares of RPG Group company, Ceat hit a record high of ₹3,624.05, as they rallied 5.5 per cent on the BSE in Tuesday's intra-day trade on expectations of margin improvement in the upcoming quarters, due to lower crude prices recently.
The Ceat stock is quoting higher for the sixth straight trading day, surging 19 per cent during the period, after the company reported its March 2025 quarter (Q4FY25) earnings. The market price of the tyre company has surpassed its previous high of ₹3,598.80 touched on December 9, 2024. It has bounced back 56 per cent from its previous month low of ₹2,322.05, touched on April 7, 2024 on the BSE.
Ceat's Q4 result 2025
Tyre major Ceat reported a healthy performance in Q4FY25 with standalone net sales growing 14.6 per cent year-on-year (YoY) at ₹3,414 crore. Gross Margins for the quarter improved by 65 bps to 37.5 per cent, largely driven by favourable revenue mix and as a result of strong cost controls across the value chain.
Earnings before interest, taxes, depreciation and amortisation (Ebitda) for the quarter was flat on a YoY basis and up 14.8 per cent quarter-on-quarter (QoQ) at ₹395 crore, while Ebitda margins came in at 11.6 per cent, up ~110 bps QoQ. Profit after tax (PAT) for the quarter stood at ₹100 crore, down 15.7 per cent YoY; and up 4.6 per cent QoQ.
On a QoQ basis, volumes in the OEM segment grew significantly, while replacement and export segments were flattish.
The management said operating margins improved in Q4 by over 120 bps, largely driven by a favourable revenue mix and as a result of strong cost controls across the value chain. The company incurred a capex of ₹946 crore during FY25 largely in capacity additions that would prepare the company well to deliver its growth plans in FY26.
Declares 300% dividend for FY25
The board has recommended a dividend of ₹30, i.e. 300 per cent per equity share of face value of ₹10 each fully paid up, for FY2024-25, subject to approval of shareholders at the ensuing Annual General Meeting, which will be paid/ dispatched within 30 days of such approval. ALSO READ | M&M rallies 8% in 2 days, nears record high. Should you buy, hold or sell?
Tariff impact on Camso and international business
As per the management, Ceat's exposure to the US (ex of Camso) is in the low single digits. For Camso, about 30 per cent of its business exports to the US are from Sri Lanka. Of this, 15 per cent of exposure comes from tracks and 15 per cent from tyres. Sri Lanka has imposed a 44 per cent reciprocal tariff on tyre imports to the US. While the reciprocal tariff has now been postponed by 90 days, given the ongoing dialogues with trading partners and global OEMs, management is confident that it would hear some positive solution on this front for the industry. However, track imports to the US attract about 4 per cent duty only. Tracks are about 50 per cent of Camso's revenue.
Brokerages View
Motilal Oswal Financial Services
The replacement segment is likely to continue to be the key growth driver. In original equipment manufacturers (OEMs), the outlook for 2Ws and tractors is healthy with a pick-up expected in the Truck, Bus and Radial (TBR) segment. Following the integration of Camso, its international business contribution will rise to 25 per cent from 19 per cent currently. Given the reduction in input cost, the brokerage firm has raised FY26/ FY27 EPS estimate by 4 per cent/ 8 per cent.
Ceat's focus on strategic areas such as PVs/ 2Ws/ OHT/ exports (to help margins), along with prudent capex plans (to benefit FCF), should continue to improve its returns in the long run. The brokerage firm reiterates 'Buy' rating on the stock with a target price of ₹3,818 (based on ~18x FY27E EPS).
Elara Capital
While there is likely to be margin relief in the upcoming quarters, especially from Q2FY26, due to lower crude prices recently, the brokerage firm believes natural rubber prices will be on a structural uptrend, given the demand-supply dynamics due to the long gestation period of rubber plantations.
Overall raw material cost remains flat QoQ, in line with earlier guidance. The company expects raw material cost to remain flat in Q1FY26, with reduction expected from Q2. Ceat has iterated its strategy to systematically retain current price levels despite input cost easing, which should bode well for margin. ALSO READ | YES Bank stock up 10% on SMBC deal buzz; time to buy, sell, hold?
Analysts believe the tyre sector and Ceat will have reported peak margin in FY24 (13.9 per cent for Ceat). The brokerage firm expects Ebitda margin of 13.2 per cent in FY26E and FY27E. However, despite the likely recovery in Ebitda margin during FY26-27, analysts expect an Ebitda compounded annual growth rate (CAGR) of a mere 8 per cent and a PAT CAGR of 9 per cent during FY24-27E.
About Ceat
Ceat, the flagship company of RPG Enterprises, was established in 1958. Today, Ceat is one of India's leading tyre manufacturers and has a strong presence in global markets. Ceat produces more than 41 million high-performance tyres, catering to various segments like 2-3 Wheelers, Passenger and Utility Vehicles, Commercial Vehicles and Off-Highway Vehicles.
About RPG
Founded by the legendary industrialist Dr. R.P. Goenka, RPG Group is a global diversified business group with operations in the areas of Tyres, Infrastructure, Information Technology, Pharmaceuticals, Energy, Plantations, and Venture Capital. Today, RPG has several companies in core sectors of the economy: the most prominent among them being CEAT, KEC International, Zensar Technologies, RPG Life Sciences, Raychem RPG, Harrisons Malayalam and Spencer International Hotels.
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