Latest news with #Ceat
Business Upturn
an hour ago
- Business
- Business Upturn
CLSA sees margin upcycle for Ceat, maintains ‘Outperform' call with Rs 3,933 target price
By Markets Desk Published on June 4, 2025, 07:59 IST CLSA has reiterated its Outperform rating on Ceat with a target price of ₹3,933, citing positive near-term drivers including margin revival and the strategic Camso acquisition. The brokerage said that Camso integration and an overall margin revival are key focus areas for the company in the near term. Ceat also expects to gain market share in the high-value TBR (Truck & Bus Radial) replacement market. The Camso deal, now completed, carries a $1.2 billion revenue potential over the next three years, according to CLSA. In addition, Ceat is currently in a margin upcycle, benefiting from the softening of raw material prices, which should contribute 200–300 basis points of margin expansion in FY26. CLSA believes the combination of a stronger product mix, synergy gains from Camso, and improving margins positions Ceat well for sustained outperformance in the coming quarters. Disclaimer: The views and target prices mentioned in this article are as stated by CLSA. They do not represent the opinions or recommendations of this publication. Readers are advised to consult their financial advisors before making any investment decisions. Markets Desk at
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Business Standard
25-05-2025
- Automotive
- Business Standard
Amid tariff jitters, tyre makers adopt strategies to safeguard margins
Despite low US exposure, Indian tyre makers are crafting mitigation strategies to address looming tariff threats and persistent margin pressures due to high input costs Anjali Singh Mumbai Listen to This Article Despite low exposure to the US, Indian tyre companies are drawing up measures to offset the impact of potential tariffs at a time when raw material prices are already denting margins. Leading players such as Ceat, Apollo Tyres and JK Tyre downplayed the immediate financial impact of potential US tariffs and retaliatory duties from countries such as Sri Lanka, citing their limited current exposure to the US market. Ceat Managing Director Arnab Banerjee said US sales form a low single-digit share of overall revenue, while Apollo CFO Gaurav Kumar pegged the company's US exposure at $100 million out of
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Business Standard
08-05-2025
- Automotive
- Business Standard
Apollo Tyres, MRF, Ceat zoom up 52% from April low; Time to hold or exit?
Technical outlook on tyre stocks: Shares of tyre-makers have witnessed a stellar run on the stock exchanges in the last one month. Historical data shows that Apollo Tyres, Ceat and MRF have rallied as much as 52 per cent from the lows hit in the month of April 2025. Individually, Ceat stock has zoomed 52.1 per cent from its low of ₹ 2,504 hit on April 7 to a new life-time high hit at ₹ 3,809 in today's (Thursday's) trading session. Similarly, MRF stock has hit a high at ₹ 1,43,275, and surged 32.7 per cent from its low of ₹ 1,08,001 hit on April 7. Shares of Apollo Tyres have jumped by 34.4 per cent from a low of ₹ 375 to a high of ₹ 504. Given this background, what should your strategy as an investor be at these counters? Here's a trading guide based on the technical charts, with key support and resistance levels. Apollo Tyres Current Price: ₹ 492 Upside Potential: 18.9% Support: ₹ 481; 450 Resistance: ₹ 520; ₹ 548; ₹ 557 Apollo Tyres stock has conquered its 200-Day Moving Average (200-DMA), in recent days, after a gap of four months. The stock is now attempting to sustain above its 20-Month Moving Average (20-MMA), which stands at ₹ 481. The near-term bias for the stock is expected to remain favourable as long as the stock holds above ₹ 481; below which the stock may test support around ₹ 450 levels. Technical chart suggests that the stock may extend its rally, and test its record high levels around ₹ 585 in the near-term. On its way up, the stock may face resistance around ₹ 520, ₹ 548 and ₹ 557 levels. Ceat Current Price: ₹ 3,658 Upside Potential: 11.5% Support: ₹ 3,485; ₹ 3,390 Resistance: ₹ 3,755; ₹ 3,917 Ceat stock has witnessed a run-away rally on the daily charts in the last six trading sessions, gaining as much as 24 per cent. The near-term bias for the stock is expected to remain upbeat as long as the stock holds above ₹ 3,485 levels; below which support for the stock can be anticipated around ₹ 3,390 levels. On the upside, the stock can potentially soar to ₹ 4,080 levels, with interim resistance likely around ₹ 3,755 and ₹ 3,917 levels. CLICK HERE FOR THE CHART MRF Current Price: ₹ 1,38,810 Upside Potential: 13.6% Support: ₹ 1,37,000; ₹ 1,30,700 Resistance: ₹ 1,50,000 The weekly chart shows that the near-term bias for MRF is likely to remain positive as long as the stock holds above ₹ 1,37,000-levels; below which next significant support for the stock is visible around ₹ 1,30,700 levels. On the upside, the stock faces overhead resistance around ₹ 1,50,000-mark; above which the stock can extend the bullish-run towards ₹ 1,57,700 levels.
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Business Standard
06-05-2025
- Business
- Business Standard
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.
Mint
02-05-2025
- Automotive
- Mint
Ceat set to regain margin muscle, but rising debt may slow the ride
A host of favourable factors is aligning to boost tyre maker Ceat Ltd's margins. While margins declined year-on-year in the March quarter (Q4FY25), they improved sequentially. Consolidated Ebitda margin stood at 11.3% in Q4, ahead of the consensus estimate of 10.7%, while gross margin came in at 37.5%. Easing input costs and price hikes in the two-wheeler and passenger vehicle segments during the quarter provided support. Ceat expects further margin tailwinds in the first half of FY26, driven by softer raw material prices. International rubber prices have fallen by $200 per tonne from the Q4FY25 range of $1,900–2,000, now trading at a ₹ 7-8/kg discount to domestic prices. Read this | Acquisition and capex keep Ceat on a roll despite short-term margin erosion Crude oil, too, has eased to $65 per barrel from $75–80 in Q4 and is expected to hover around $65-70 in the near term. Key crude derivatives such as butadiene and caprolactam were largely stable in Q4 but have declined 2-5% in April. The company plans to retain the gains from lower input costs to support margins, while taking price hikes selectively. Management has indicated comfort at a gross margin level of over 40%. Strategically, Ceat continues to pivot towards margin-accretive segments—two-wheelers, passenger cars, and off-the-road (OTR) tyres—while reducing reliance on the truck segment. 'Revenue contribution from these focus areas has surged over the years (to 63% in FY25 from a mere 20% in FY10)," said a Motilal Oswal Financial Services report dated 30 April. Ceat has also increased presence in high-margin off-the-highway (OHT)/international segments with the Camso acquisition. With Camso's integration, the company expects the international mix in its product portfolio to rise to 26% from around 19%. Camso's financials will be consolidated starting Q2FY26. Read this | Can Camso transform tyre maker Ceat into a high-margin business? Improving profitability prospects have driven earnings upgrades. Emkay Global Financial Services has upgraded Ceat's FY26/FY27 earnings per share estimates by 8%/5% on accelerating growth, and recent raw material price decline. 'We like Ceat given its superior growth prospects led by higher exposure to consumer-facing categories and ongoing market share gains, with potentially strong margin revival ahead if raw material (prices) sustains," said the Emkay report dated 1 May. Also read | In US-China trade war, Indian tyre makers could be collateral damage Ceat shares have gained 22% over the past year, handily outperforming the Nifty500 index. However, the management has flagged a likely increase in debt, from ₹ 1,928 crore currently to ₹ 3,000 crore, as it completes the Camso payment and operations scale. Consequently, the debt-to-Ebitda ratio is expected to rise to around 2.5x, though still below the previous peak of 2.8x.
