Growth to be driven by digitizationadvanced manufacturing

11 Mar 2024
5 Min read 
  • CEAT, an automobile sector company, hosted an event showcasing its Chennai facility focused on digitization and advanced manufacturing.
  •  The company has no plans for greenfield capex in FY25/26 but will focus on expanding existing capacity.
  •  CEAT aims to drive growth through digitization, advanced manufacturing, and expanding in international markets.
  •  Valuations at 16.6x/15.3x FY24E/FY25E EPS do not fully capture the benefits from new capacities and softening of raw material costs.
  •  The company's Chennai plant produces PCR and TBR tires, with a focus on quality management and new process development.
  •  CEAT's digital initiatives have increased OEM and export sales and reduced training time for new employees.
  •  The company plans to ramp up TBR tire capacity in Chennai and expand operations in the US/LatAm markets.
  •  CEAT's financials show a stable growth outlook and potential for margin expansion in FY24E.
  •  The stock has a buy rating with a target price of INR3,290.
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