Tyre-maker CEAT Ltd (NS:CEAT) saw its share price fall from Rs 1,650 levels in February to Rs 1,280 levels in May and moved in a range until July 10. However, this week has seen its share price move up to Rs 1,438. Is this the start of a turnaround for the stock?
CEAT prices were subdued thanks to the second pandemic wave and its impact on the auto sector. Now, as the economy slowly recovers, brokerages are positive on the stock as well.
Motilal Oswal (NS:MOFS) has a price target of Rs 1,700 on CEAT. It says, “After five years of weak demand, it expects growth to pick-up as a base adjustment has occurred. It plans to maintain leadership in the 2 wheeler segment (at 28-30%) and expand dominance in PCR (to 20% from 13-15% currently). In T&B, it aims to increase its market share in TBR to 13-15% (from 8% currently and take it to similar levels as in the TBB segment).”
ICICI Direct also has a buy on the stock. It says that the auto ancillary space has regained momentum after five months, and CEAT has been an underperformer in this space. It has a price target of Rs 1,660 on the stock.