Is CEAT overvalued or undervalued?

As of 24 October 2025, CEAT's valuation grade has moved from fair to attractive, indicating a positive shift in its market perception. The company is currently considered undervalued. Key ratios include a PE ratio of 31.99, an EV to EBITDA of 11.64, and a ROCE of 14.13%.
In comparison to its peers, CEAT's PE ratio is lower than MRF's 37.74, which is rated fair, and significantly lower than Balkrishna Industries, which is considered very expensive at a PE of 30.94. Additionally, CEAT's recent stock performance has outpaced the Sensex, with a year-to-date return of 27.95% compared to the Sensex's 7.77%. This reinforces the view that CEAT is currently undervalued relative to its growth potential and market peers.