Ceat’s Q2 Earnings Put It In The Fast Lane, But Analyst Expects A Pit Stop Ahead

• The tyre-maker’s Q2 earnings gave it fresh traction, supported by higher volumes and softer input costs.
• Ceat’s management aims for double-digit growth till FY26. 
• Analyst believes that a small dip towards the 200-day EMA could be a healthy correction.

Ceat shares traded rangebound on Thursday after it saw a record rally earlier this week, driven by strong September quarter (Q2 FY26) earnings performance. 

The tyre-maker reported a 14% rise in revenues year-on-year (YoY), with 11% growth in sales volumes even as the average price per tyre increased 3%. Profit margins (EBITDA) improved sharply, up 415 bps quarter-on-quarter (QoQ), and 350 bps (YoY), while raw material costs dropped 5%.

Q2 earnings: What’s worked for Ceat?

SEBI-registered analyst Mayank Singh Chandel explained that what cheered investors is this: Ceat sold more, earned more per tyre, and spent less on materials. Lower rubber and crude prices gave it the grip to boost profits. 

He also added that going forward, Ceat’s management sounded confident as it aimed for double-digit growth till FY26. The company also plans to gain market share in passenger car tyres, expects a recovery in replacement demand, and sees steady growth in exports. 

Another notable milestone is Camso’s integration, which Chandel believes is a a strategic step that will make Ceat stronger in off-road and industrial tyres. The process is likely to finish in the next three to six quarters. 

Technical charts show the stock is in the fast lane 

Ceat stock has been rising since June 2022, and Monday’s big move came with heavy volume, a sign of strong buying interest. However, Chandel cautioned that after such a quick sprint, the stock might take a short break. 

He believes that a small dip towards the 200-day Exponential Moving Average (EMA) could be a healthy correction, like a refuelling stop before the next run. The bigger trend remains bullish, and long-term investors might look to accumulate on dips instead of chasing higher levels.

What is the retail mood on Stocktwits?

Data on Stocktwits showed that retail sentiment turned ‘neutral’ a day ago amid ‘high’ message volumes. It was ‘bullish’ last week.

Ceat shares have run up 33% so far this year. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Share

·

Add us on