The Indian tyre manufacturing industry plays a significant role in the country’s economy, contributing substantially to both domestic demand and exports. With a growing automotive sector, the industry supplies tyres for a wide range of vehicles, from two-wheelers to commercial trucks. India is one of the largest exporters of tyres globally, catering to markets in Europe, North America, and other regions.
Some of the largest tyre manufacturers in India include MRF, JK Tyre, and CEAT, all of which have a strong presence both domestically and internationally. These companies are known for their innovation, quality, and technological advancements, driving the growth of India’s tyre industry. Their global expansion helps solidify India’s position as a leading player in the global tyre manufacturing market.
Share Price
The shares of CEAT India Limited are currently trading at Rs. 3,141 up by 2.31% from its previous close of Rs. 3,070 as of January 07, 2024
Recent Updates
Investment in Tyresnmore Online Private Limited
Tyresnmore Online Private Limited, a private company in the auto ancillary sector with a turnover of ₹2,563.66 Lakhs as of March 31, 2024, is set to receive an investment from CEAT Limited. CEAT plans to acquire 21,055 equity shares of Tyresnmore for a total consideration of ₹257 Lakhs through a rights issue. This transaction falls under related party transactions and is conducted at arm’s length. CEAT’s promoter group does not have any interest in Tyresnmore, aside from CEAT being its wholly-owned subsidiary.
Objectives and Timeline of the Investment
The investment is aimed at maintaining CEAT’s 100% ownership of Tyresnmore, which operates in the auto ancillary industry, focusing on automotive tyres, batteries, and related services. The shares will be allotted to CEAT on or before January 20, 2025, with no governmental or regulatory approvals required for the transaction.
Price target Given by Emkay Global
Target Price: 4,000
CMP: 3,123
Potential Upside: 27%
Emkay Global has given a “BUY” rating on CEAT and raised its target price to ₹4,000, implying a 27% potential upside from the previous close. The revised target price reflects the company’s
strategic acquisition, which aligns with its focus on premium products, off-highway tyres, and exports. CEAT aims to increase its off-highway tyres and exports mix to 25% each, up from current levels of around 15% and 19-20%, respectively.
CEAT’s Camso acquisition strengthens its presence in the U.S. and Europe, where it holds a double-digit market share. Management expects synergies in distribution and client relationships to drive market share gains. Other segments like agriculture, power sports, and harvesters offer additional growth opportunities. The stock is valued at 18 times the estimated FY26 P/E ratio.
Written By: Dipangshu Kundu
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