Is CEAT overvalued or undervalued?

As of 31 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 31.10, an EV to EBITDA of 11.35, and a ROE of 11.31%. In comparison to its peers, MRF has a higher PE ratio of 37.27 and an EV to EBITDA of 16.77, while Apollo Tyres presents a more attractive valuation with a PE of 30.4 and an EV to EBITDA of 10.02.
Despite the recent downgrade in valuation, CEAT has demonstrated strong stock performance, with a year-to-date return of 24.39% compared to the Sensex's 7.42%. This suggests that while the stock is currently fairly valued, its historical performance may indicate potential for future growth.