Analysts upbeat on CEAT post Q3, but see near-term margin pressure

Brokerages have maintained bullish stances on Ceat following a strong Q3FY26 performance, citing robust demand tailwinds, improved operational efficiency, and structural growth drivers. However, analysts also flagged near-term margin pressure due to currency and commodity headwinds. The company released its December quarter results on Monday, after market hours and conducted its earnings call on Tuesday. 

 

At 10:47 AM, Ceat’s share price was trading 4.21 per cent lower at ₹3,556.45 per share. In comparison, BSE Sensex was down 0.64 per cent at 81,658.28. While the stock gained 2 per cent on Monday, it has shed nearly 9 per cent over the past two sessions.  CATCH STOCK MARKET UPDATES TODAY LIVE

Ceat Q3 results highlights:

In Q3FY26, Ceat reported a 60 per cent jump in its consolidated net profit to ₹155.77, as compared to ₹97.11 crore a year ago. On a sequential basis, however, profit slumped 16.2 per cent from ₹185.95 crore. 

 

Ceat’s revenue from operations for the quarter stood at ₹4,157.05 crore, up 26 per cent from ₹3,299.9 crore. Sequentially, revenue increased 10.2 per cent from ₹3,772.65 crore. 

 

Its earnings before interest, taxes, depreciation and amortisation (Ebitda) for the quarter stood at ₹568 crore, as compared to ₹346.3 crore year-on-year (Y-o-Y). Ebitda margin stood at 13.7 per cent, as compared to 10.5 per cent a year ago. 

 

Management signalled confidence in sustaining double-digit growth in the domestic market in the near term, supported by the recent goods and services (GST) rate cut on tyres, positive rural sentiment, and rising consumer preference for premium products. The international business also performed well, with broad-based growth across key geographies, while limited US tariff exposure has kept the impact immaterial.  ALSO READ | Persistent Systems slips 5% on profit booking despite strong Q3 show

Brokerages' views Ceat

Motilal Oswal maintained a 'Buy' rating with a target price of ₹4,579 (based on 19x Dec'27E earnings per share (EPS)), citing the GST cut and benign input costs as supportive for the sector. While acknowledging that the Camso acquisition will take time to normalise, the brokerage remains optimistic on the long-term benefits the deal can deliver.

 

JM Financial, meanwhile, raised its FY26E and FY27E revenue estimates by 6 per cent and 6.5 per cent, respectively, but trimmed margin assumptions by 40 basis points (bps) and 90 bps due to near-term headwinds. The brokerage flagged potential pressure from rupee depreciation and higher international rubber prices, while noting that the full margin benefit from Camso is expected over 3–5 quarters. It maintained an 'Add' rating with a target price of ₹4,110. 

Despite near-term softness at Camso, Emkay Global Financial Services believes Ceat is well-placed to benefit from the demand upturn—backed by its strong presence in consumer-facing segments (PV/2W), share gains, and an exports/OHT focus, with longer-term benefits from the acquisition. The brokerage retained its ‘Buy’ rating and raised its target price to ₹4,900 from ₹4,600. 

 

YES Securities expects a confluence of healthy volume growth and margin expansion to support a re-rating, especially after the stock’s recent underperformance. However, it flagged that raw material headwinds are likely to persist, with sharp rupee depreciation and higher international natural rubber prices expected to hurt margins by 1–1.5 per cent.

 

The brokerage said Ceat’s focus on branding, premium product launches, and ramp-up in key strategic segments—two-wheelers (2W), passenger car radials (PCR), off-the-road tyres (OTR), and exports—should aid volumes. It added that Camso execution over the next 2–3 quarters will remain an important monitorable. The brokerage reiterated ‘Add’, but cut target to ₹4,272 per share from ₹4,284 per share.

 

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