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CEAT Ltd

NSE: CEATLTD BSE: 500878

3855

(-0.53%)

Fri, 27 Feb 2026, 01:37 pm

CEAT Analysis

dividend

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Pros

  • Dividends per share have increased over the past 10 years.
  • Dividends paid are well covered by earnings (4.8x coverage).
  • Dividends after 3 years are expected to be thoroughly covered by earnings (7.1x coverage).
  • CEAT's pays a higher dividend yield than the bottom 25% of dividend payers in India (0.76%).
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Cons

  • Dividends per share have been volatile in the past 10 years (annual drop of over 20%).
  • CEAT's dividend is below the markets top 25% of dividend payers in India (3.08%).

future

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Pros

  • CEAT's earnings growth is expected to exceed the low risk savings rate of 7.2%.
  • CEAT's earnings are expected to increase by more than the low risk growth rate in 3 years time.
  • Performance (ROE) is expected to be above the current IN Auto Components industry average.
  • An improvement in CEAT's performance (ROE) is expected over the next 3 years.
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Cons

  • Cash flow for CEAT is expected to decrease over the next 2 years.
  • CEAT's earnings are expected to grow by 10.2% yearly, however this is not considered high growth (20% yearly).
  • CEAT's earnings growth is positive but not above the India market average.
  • CEAT's earnings are expected to decrease over the next year.
  • CEAT's net income is expected to increase but not above the 50% threshold in 2 years time.
  • CEAT is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
  • CEAT's revenue is expected to increase but not above the 50% threshold in 2 years time.
  • CEAT's revenue is expected to grow by 3.6% yearly, however this is not considered high growth (20% yearly).
  • CEAT's revenue growth is positive but not above the India market average.

health

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Pros

  • CEAT is profitable, therefore cash runway is not a concern.
  • CEAT is profitable, therefore cash runway is not a concern.
  • Debt is well covered by operating cash flow (49.6%, greater than 20% of total debt).
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Cons

  • CEAT's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
  • Debt is not covered by short term assets, assets are 0.9x debt.
  • CEAT's long term commitments exceed its cash and other short term assets.
  • The level of debt compared to net worth has increased over the past 5 years (45.2% vs 65.8% today).
  • Interest payments on debt are not well covered by earnings (EBIT is 3x annual interest expense, ideally 3x coverage).
  • CEAT's level of debt (65.8%) compared to net worth is high (greater than 40%).
  • High level of physical assets or inventory.

management

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Pros

  • The tenure for the CEAT board of directors is about average.
  • Anant's compensation has been consistent with company performance over the past year, both up more than 20%.
  • More shares have been bought than sold by CEAT individual insiders in the past 3 months.
  • The tenure for the CEAT management team is about average.
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Cons

  • Anant's remuneration is higher than average for companies of similar size in India.

misc

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Pros

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    Cons

    • CEAT has significant price volatility in the past 3 months.

    past

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    Pros

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      Cons

      • CEAT's 1-year earnings growth is negative, it can't be compared to the 5-year average.
      • CEAT's year on year earnings growth rate was negative over the past 5 years and the most recent earnings are below average.
      • CEAT used its assets less efficiently than the IN Auto Components industry average last year based on Return on Assets.
      • CEAT's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
      • CEAT has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
      • CEAT's 1-year earnings growth is negative, it can't be compared to the IN Auto Components industry average.

      value

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      Pros

      • CEATLTD outperformed the Auto Components industry which returned -22.4% over the past year.
      • CEATLTD outperformed the Market in India which returned -14.5% over the past year.
      • NSEI:CEATLTD is up 29.1% outperforming the Auto Components industry which returned 13.2% over the past month.
      • NSEI:CEATLTD is up 29.1% outperforming the market in India which returned 8% over the past month.
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      Cons

      • CEAT's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).
      • CEAT's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).
      • CEAT is overvalued based on assets compared to the IN Auto Components industry average.
      • CEAT is poor value based on expected growth next year.
      • CEAT is overvalued based on earnings compared to the IN Auto Components industry average.
      • CEAT is overvalued based on earnings compared to the India market.

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