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, with 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 and higher than JK Tyre & Industries' 24.43, suggesting that while CEAT is priced attractively, it still commands a premium over some competitors.
The company's strong performance is further highlighted by its impressive stock returns, outperforming the Sensex significantly over various periods, including a 48.05% return over the past year compared to the Sensex's 5.18%. This performance, coupled with a PEG ratio of 0.00, indicates that CEAT is not only growing but also doing so at a reasonable valuation relative to its earnings potential. Overall, CEAT appears to be a compelling investment opportunity in the tyre and rubber products industry.