CEAT Downgraded to 'Hold' by MarketsMOJO, But Still Shows Potential for Growth

CEAT, a midcap company in the tyres and allied industry, has recently been downgraded to a 'Hold' by MarketsMOJO on October 3rd, 2024. This decision was based on technical factors, with the stock currently in a mildly bullish range and its MACD and KST indicators also showing bullish trends.
However, CEAT still has attractive valuations with a ROCE of 19.8 and a low enterprise value to capital employed ratio of 2.5. In addition, the stock is currently trading at a discount compared to its historical valuations. Over the past year, CEAT has generated a return of 43.30%, while its profits have increased by 103.4%. This has resulted in a low PEG ratio of 0.2 for the company.

One factor that may provide some reassurance to investors is the high institutional holdings of 35.86%. These investors have the resources and capability to thoroughly analyze the fundamentals of companies, making their confidence in CEAT a positive sign.

CEAT has also shown consistent returns over the last 3 years, outperforming the BSE 500 index in each of the last 3 annual periods. However, the company's results for the quarter ending June 2024 were flat, with a decrease in PAT of -12.7% and the lowest PBDIT and operating profit to net sales ratios in the last quarter.

Overall, while CEAT may not be a strong buy at the moment, it still has potential for growth in the future. Investors should keep an eye on the company's performance and monitor any changes in its technical indicators before making any investment decisions.