Update on the Indian Equity Market:
\nOn Wednesday Nifty closed 0.3% higher at 11,917. Among the sectoral indices, Fin Services (+2.0%), Bank (+1.6%), and Private Bank (+1.5%) closed higher. IT (-1.3%), Pharma (-0.7%), and Auto (-0.3%) closed lower. Wipro (-7.1%), NTPC (-4.1%), and ONGC (-3.1%) closed on a negative note. Bajaj Finserv (+4.1%), SBILIFE (+3.4%), and Bajaj Finance (+2.8%) were among the top gainers.<\/p>\n
Excerpts from an interview of Mr. Anant Goenka, MD & CEO, CEAT Ltd with ET NOW dated 12th October 2020:<\/p>\n
\u25cf\tThe demand for tyres has picked up faster than expectations.
\n\u25cf\tThey operate in 3 markets- Replacement, Auto players, and Export.
\n\u25cf\tThe replacement market has played very well and it leads the way, OEM\u2019s has recently seen a pick up from August and September and reached pre-covid levels. The Export segment has also seen gradual growth.
\n\u25cf\tAmongst vehicle categories, the two-wheeler and tractor industry is showing the strongest demand followed by the passenger car segment.
\n\u25cf\tThe Commercial Vehicle OEM segment has yet to show growth. The demand is slow over there.
\n\u25cf\tThe rural sector has also shown a very strong demand for the company.
\n\u25cf\tThe company is very well positioned at this point in time and had set up a fair amount of capacity.
\n\u25cf\tThe company\u2019s capacity is well utilized.
\n\u25cf\tThe company had set a new facility in Nagpur for 2 Wheelers and the PV car facility in Chennai, and Truck facility in Halol is now ramping up. The company has invested around Rs 3,000 crore.
\n\u25cf\tThe last six months were about managing supplies.
\n\u25cf\tThings are much clear for the company up to December, January onwards will have to see how things will pan out.
\n\u25cf\tThe company is planning to reduce its cost by Rs 1000 mn.
\n\u25cf\tSpeaking on the manufacturing front, he said India is in a strong position in the Auto Space. Within Type space, the industry is capable of manufacturing all kinds of tyres.
\n\u25cf\tOn Export opportunities, he said the market has shown a linear growth. It is one big area where the Industry can take advantage of the current situation.
\n\u25cf\tThe company is planning to de-risk the exposure towards China by focusing to have at least one domestic supplier for key raw materials.
\nConsensus Estimate: (Source: market screener and Investing.com websites)
\n\u25cf\tThe closing price of CEAT was \u20b9 1,004\/- as of 14-October-2020. It traded at 22x\/ 15x\/ 13x the consensus Earnings per share estimate of \u20b9 46.6\/65.5\/79.0 for FY21E\/ FY22E\/ FY23E respectively.
\n\u25cf\tThe consensus average target price for CEAT is \u20b9 967\/- which implies a PE multiple of 12x on FY23E EPS of \u20b979.0\/-.
\nDisclaimer: \u201cThe views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Update on the Indian Equity Market: On Wednesday Nifty closed 0.3% higher at 11,917. Among the sectoral indices, Fin Services (+2.0%), Bank (+1.6%), and Private Bank (+1.5%) closed higher. IT (-1.3%), Pharma (-0.7%), and Auto (-0.3%) closed lower. Wipro (-7.1%), NTPC (-4.1%), and ONGC (-3.1%) closed on a negative note. Bajaj Finserv (+4.1%), SBILIFE (+3.4%), […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[222,566],"tags":[567,254],"_links":{"self":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/1438"}],"collection":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/comments?post=1438"}],"version-history":[{"count":1,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/1438\/revisions"}],"predecessor-version":[{"id":1439,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/1438\/revisions\/1439"}],"wp:attachment":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/media?parent=1438"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/categories?post=1438"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/tags?post=1438"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}