Prabhudas Lilladher's research report on CEAT While Ceat reported a YoY decline in its standalone earnings in Q2, the dip was lower than our expectation. The relatively stable input costs and increase in share of more profitable products in its mix would have a positive impact on Ceat’s performance. Revenue growth is also expected to be better with higher demand for two‐wheelers and UVs and capacity constraints would be addressed by its ongoing expansion. Higher profitability and increase in cash flow generation would result in an improved balance sheet position from FY18. We maintain a “BUY”, while retaining our estimates and target price.
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