CEAT Limited shares surged approximately 12% following the announcement of strong Q4 FY26 results along with a dividend declaration on April 28. According to reports from ET Now, the tyre manufacturer delivered impressive financial performance with profit rising to ₹243.8 crore compared to ₹99.49 crore in Q4 FY25. Revenue increased significantly to ₹4,219 crore from ₹3,421 crore, while EBITDA grew to ₹592.8 crore from ₹388.12 crore. The company's EBITDA margin improved to 14.1% from 11.3% year-on-year, and it has recommended a dividend of ₹35 per share.
Despite the strong quarterly performance, brokerage opinions on CEAT remain divided following the results announcement. According to ET Now, Motilal Oswal maintains a buy rating and has revised the target price to ₹4,228 from ₹3,943, citing the GST rate cut benefits for tyre demand and the company's ability to pass on cost increases. However, Emkay downgraded the stock to reduce with a target price of ₹3,600, expressing concerns about near-term margin pressure from rising raw material costs and expected price hikes of 15-20% in Q1 FY27.
CEAT CEO and MD Arnab Banerjee highlighted the company's strong performance across all segments, including international business, despite geopolitical tensions. As reported by ET Now, Banerjee acknowledged short-term challenges from steep raw material cost increases but emphasized the company's intention to mitigate these through pricing strategies and cost management. The management remains committed to expanding capacities in line with growth plans while navigating the current cost environment.
Looking ahead, the company faces mixed financial projections across different brokerages. According to ET Now, Nuvama downgraded the stock to hold with a reduced target price of ₹3,900 from ₹4,500, citing concerns about earnings performance lagging revenue growth and elevated net debt of ₹29.4 billion expected in FY28. The brokerage expects revenue to grow at 15% CAGR over FY26-28 driven by core business growth and the Camso acquisition, while earnings are projected to grow at 13% CAGR over the same period, impacted by elevated input costs.
