CEAT Limited was listed on the BSE and NSE on February 1, 2008. In the last five years, its stock has given a massive return of more than 250% to its investors. Will CEAT continue to provide such great returns in the future as well? Let’s explore CEAT growth potential and CEAT share price target from 2025 to 2050 in this article.
About CEAT
CEAT Limited was founded in 1958. It is one of the biggest tire companies in India and the main company of the RPG Group. CEAT makes tires for a wide range of vehicles, such as two-wheelers, passenger cars, trucks, buses, and off-road vehicles. The business has six factories in India and it export to more than 110 countries around the world.
CEAT Business Model
- Selling tires for cars: CEAT’s main source of income comes from making and selling tires for a wide range of vehicles, such as buses, trucks, motorcycles, cars, and farm equipment.
- Partnerships with Original Equipment Manufacturers (OEMs): The company CEAT makes about 27% of its money by selling tires straight to car companies.
- Export Markets: About 25% of CEAT’s income comes from exports. The company is constantly growing in international markets like the U.S., Europe, and Latin America so that it can be seen all over the world.
CEAT Fundamental Analysis
| Stock Name | CEAT Ltd. |
|---|---|
| NSE Symbol | CEATLTD |
| Market Cap | ₹ 11734 Cr. |
| 52W High | ₹ 3581 |
| 52W Low | ₹ 2210 |
| Stock P/E | 23.1 |
| Book Value | ₹ 1038 |
| Dividend Yield | 1.03 % |
| ROCE | 20.4 % |
| ROE | 18.1 % |
| Face Value | ₹ 10.0 |
| Shareholders | March 2023 | March 2024 | Dec 2024 |
|---|---|---|---|
| Promoters | 47.21% | 47.21% | 47.21% |
| FIIs | 23.30% | 20.16% | 15.83% |
| DIIs | 13.60% | 15.91% | 20.54% |
| Public | 15.90% | 16.73% | 16.41% |
| No. of Shareholders | 94,232 | 1,14,397 | 1,56,333 |
Key Factors Driving CEAT Future Growth
- Lead in the EV Tire Market: Within two years, CEAT wants to be the market leader in tires for electric vehicles (EVs). At the moment, it has a 40% share of EV tires for two-wheelers and a 14–15% share of EV tires for passenger vehicles. The company wants to make more products that are made for electric vehicles, like EnergyDrive tires for cars, EnergyRide tires for motorcycles, and WinEnergyX3R tires for trucks.
- Strategic Acquisition of the Camso Brand: For $225 million in December 2024, CEAT bought the Camso brand from Michelin. This purchase makes CEAT stronger in the off-highway tire market, which includes tires for heavy-duty vehicles like tractors and bulldozers.
- Growth in the Truck and Bus Radial (TBR) Segment: Over the next two to three years, CEAT wants to raise its TBR tire market share from 7% to 13%. A TBR plant worth ₹670 crores will be built near Chennai. It will make 1,500 tires every day, with 35% going to exports, 40% to the replacement market, and 25% to original equipment manufacturers (OEMs).
- Capital Expenditures for Capacity Expansion: For FY24, CEAT kept about ₹750 crore for capital expenditures, mostly to make its Ambernath plant in Maharashtra better at making agri-radial tires.
- Goal for FY26 Double Export Revenue: By FY26, CEAT wants to double its export revenue to ₹4,000 crore. This goal is helped by more off-road tires being sold and entering new markets, such as the U.S. There are also plans to release car/SUV and TBR products by the end of FY24.
- Focus on Premium and Niche Segments: CEAT wants to grow in premium segments like adventure biking and MotoGP versions. It also wants to get 4% more market share in the two-wheeler tire space. To help its growth, the company also wants to make itself more known in the south.
Pros of CEAT
- Low PE Ratio Compared to Peers: CEAT’s PE ratio is 23.1, which is lower than the industry average of 25.1, making it relatively undervalued and potentially a good investment opportunity.
- Increase in DIIs Holding: DIIs holding increased from 19.75% in September 2024 to 20.54% in December 2024, showing a positive outlook towards CEAT by the DIIs.
Cons of CEAT
- Decrease in FIIs Holding: Foreign Institutional Investors (FIIs) have reduced their holding to 15.83% in December 2024 from 16.65% in September 2024, indicating a decline in FII’s confidence in the company’s future growth prospects.
| Years | Target Price |
|---|---|
| CEAT Share Price Target 2025 | ₹3650 to ₹4500 |
| CEAT Share Price Target 2026 | ₹4350 to ₹5850 |
| CEAT Share Price Target 2027 | ₹5250 to ₹7600 |
| CEAT Share Price Target 2028 | ₹6250 to ₹9900 |
| CEAT Share Price Target 2029 | ₹7500 to ₹12,850 |
| CEAT Share Price Target 2030 | ₹9050 to ₹16,750 |
| CEAT Share Price Target 2035 | ₹18,000 to ₹50,000 |
| CEAT Share Price Target 2040 | ₹36,000 to ₹1,50,000 |
| CEAT Share Price Target 2050 | ₹1,45,000 to ₹9,00,000 |
Disclaimer
This article is for educational purposes only. It is not a stock recommendation and should not be treated as such. Please ask your financial advisor before making any investment decision.