Is CEAT overvalued or undervalued?

As of 20 October 2025, CEAT's valuation grade has moved from attractive to fair, indicating a shift in its perceived value. The company is currently fairly valued, with a PE ratio of 32.42, an EV to EBITDA ratio of 11.78, and a ROCE of 14.13%. In comparison to its peers, MRF has a higher PE ratio of 37.96 and an EV to EBITDA of 17.08, while Apollo Tyres is more attractively valued with a PE ratio of 30.63 and an EV to EBITDA of 10.09.
Despite the fair valuation, CEAT has shown strong performance relative to the Sensex, with a year-to-date return of 29.68% compared to the Sensex's 7.97%. This outperformance, along with its solid financial ratios, suggests that while CEAT is fairly valued, its growth potential and recent stock performance may still attract investor interest.