Valuation Metrics and Recent Grade Change
On 16 Dec 2025, Goodyear India’s Mojo Grade was upgraded from a Strong Sell to a Sell, with a current Mojo Score of 43.0. This adjustment reflects a marginal improvement in market sentiment but still indicates a cautious stance. The company’s valuation grade shifted from very expensive to expensive, driven primarily by its P/E ratio of 34.34 and a P/BV of 3.39. These figures remain significantly higher than those of key competitors in the Tyres & Rubber Products sector.
Additional valuation multiples include an EV to EBIT of 28.13 and EV to EBITDA of 15.68, both suggesting a premium valuation relative to earnings and cash flow. The PEG ratio stands at 1.49, indicating moderate growth expectations priced into the stock. Dividend yield is a modest 2.83%, while return on capital employed (ROCE) and return on equity (ROE) are 10.34% and 9.86% respectively, reflecting moderate operational efficiency but not exceptional profitability.
Peer Comparison Highlights Valuation Premium
When compared with peers, Goodyear India’s valuation appears stretched. Apollo Tyres, CEAT, and JK Tyre & Industries all trade at more attractive valuations, with P/E ratios of 25.06, 25.47, and 28.52 respectively, and EV/EBITDA multiples well below Goodyear’s 15.68. Notably, Apollo Tyres and CEAT are rated as attractive investments based on their valuation metrics, while TVS Srichakra, despite a very high P/E of 115.08, is classified as fair due to other factors such as growth prospects.
This premium valuation for Goodyear India suggests that investors are pricing in expectations of superior performance or growth, which recent returns have yet to fully justify.
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Price Movement and Market Capitalisation Context
Goodyear India’s current market price stands at ₹843.70, up from the previous close of ₹793.05, with intraday highs reaching ₹920.00. The stock remains below its 52-week high of ₹1,071.00 but comfortably above the 52-week low of ₹764.00. The company holds a market cap grade of 3, indicating a mid-sized market capitalisation within its sector.
The recent 6.39% day gain contrasts with a more subdued year-to-date (YTD) return of -0.58%, which slightly outperforms the Sensex’s -1.92% over the same period. However, longer-term returns paint a less favourable picture. Over one year, Goodyear India has declined by 9.53%, while the Sensex has gained 7.07%. Over three and five years, the stock has underperformed significantly, with losses of 20.21% and 13.04% respectively, compared to Sensex gains of 38.13% and 64.75%. Even over a decade, Goodyear’s 69.69% return lags far behind the Sensex’s 239.52% growth.
Financial Performance and Operational Efficiency
Goodyear India’s ROCE of 10.34% and ROE of 9.86% indicate moderate returns on capital and equity, but these figures are not particularly compelling when benchmarked against sector averages. The company’s EV to capital employed ratio of 4.22 and EV to sales of 0.73 suggest a valuation premium relative to its asset base and revenue generation.
While the dividend yield of 2.83% offers some income appeal, it is not sufficiently high to offset concerns about valuation and growth prospects. The PEG ratio of 1.49 implies that the stock is priced for moderate growth, but this is not markedly better than peers such as CEAT, which has a PEG of 1.22.
Investor Implications and Outlook
Investors considering Goodyear India must weigh the premium valuation against the company’s historical underperformance and moderate profitability metrics. The recent upgrade from Strong Sell to Sell suggests some improvement in outlook, but the stock remains a cautious proposition given its stretched P/E and P/BV ratios relative to peers.
Market participants should also consider the broader sector dynamics and competitive pressures within the Tyres & Rubber Products industry. With peers trading at more attractive valuations and some demonstrating stronger growth potential, Goodyear India’s current price attractiveness is diminished despite recent positive price momentum.
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Conclusion: Valuation Premium Warrants Caution
In summary, Goodyear India Ltd’s shift from very expensive to expensive valuation status reflects a modest improvement in price attractiveness but still signals a premium that is not fully supported by financial performance or relative returns. The company’s elevated P/E and P/BV ratios, combined with middling profitability and underwhelming long-term returns, suggest that investors should approach the stock with caution.
Comparisons with sector peers reveal more attractively valued alternatives, underscoring the importance of thorough due diligence and valuation analysis before committing capital. While recent price gains and a Mojo Grade upgrade offer some optimism, the overall investment case remains tempered by valuation concerns and competitive pressures within the tyre industry.
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