CEAT Share Price: Emkay Sets Target at Rs 4,100, Buy Sell or Hold?

CEAT Ltd has received a fresh vote of confidence from Emkay Global, which has raised the stock’s target price by 5% to Rs 4,100, citing a compelling combination of accelerating revenue growth, firm pricing discipline, and improving margin visibility. The revised valuation, based on 18x FY27 estimated earnings per share (EPS), comes with a reiterated ‘BUY’ rating, positioning CEAT as a top pick in the tyre sector.

The upbeat sentiment follows a solid Q4 FY25 financial performance, with consolidated revenue rising 14% year-on-year to Rs 3,420 crore, supported by broad-based volume growth and stable realizations. The homegrown tyremaker's EBITDA margin improved by 100 basis points sequentially to 11.3%, driven by a 64-basis points(bps) expansion in gross margin and effective cost management—delivering an operating profit that surpassed Street estimates by around 9%.

“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 RM sustains, stated Emkay in its latest report.

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Management indicated that recent declines in raw material prices could begin to benefit margins from late Q1 FY26. The company aims to hold its current price levels while improving its gross margin to 40% or higher, up from 37.5% currently—a move that could significantly boost profitability without eroding competitiveness.

Emkay has revised CEAT’s earnings projections upwards—raising FY26 and FY27 EPS estimates by 8% and 5%, respectively. This revision reflects not only strong near-term performance but also longer-term structural tailwinds, including rising rural demand in the two-wheeler segment and growing fitments in higher-value passenger vehicle (PV) OEM categories.

As per the brokerage firm, strategic market share gains across key segments—particularly in truck and bus radials (TBRs) and two-wheelers—have further strengthened the company’s positioning. CEAT’s exposure to the mass-consumption side of the automotive industry, coupled with prudent capital allocation, adds to its appeal in an uncertain macroeconomic environment.

Meanwhile, the integration of the recently acquired Camso business is expected to enhance CEAT’s footprint in the off-highway tyre (OHT) segment. With capex guidance of Rs 900–1,000 crore for FY26 and an eye on export opportunities, the company is balancing growth with capital discipline.

Despite a likely increase in absolute debt, CEAT expects to maintain leverage well below historical peaks, underscoring its financial prudence.

With operating metrics trending positively and strategic bets starting to pay off, Emkay believes CEAT is well-positioned to deliver sustainable earnings growth—justifying the upgraded valuation and continued bullish stance.