CEAT Stock Price: Tire and rubber products company CEAT Ltd‘s (NSE: CEATLTD) share saw heavy buying on 9 December. This led to the price jumping up 13 percent in 5 days to a high of Rs 3,578.80.
This is the 52-week high for the stock. The company had said on Friday, December 6, that it had entered into a definitive agreement to purchase Michelin Group’s Camso brand off-highway construction equipment bias tires and tracks business.
Purchases will be done via one or more newly formed subsidiaries. It will be an all-cash deal of approximately $225 million.
This purchase by CEAT Ltd is yet to get regulatory approval. The transaction will include a business with revenue of approximately $213 million in calendar year 2023, 2 manufacturing facilities in Sri Lanka, and global ownership of the Camso brand with an initial licensing period of 3 years.
CEAT Stock Climbed 50% In A Single Year
CEAT Ltd’s share has risen almost 45.59% over the last year. The cost has increased by 11 % in 7 days.
The market cap of the company is in the region of the amount of 14.000 crore rupees. Promoters held 47.21 percent stake in the company as of the end of September 2024.
A Brokerage Was Bullish On CEAT
After the news of the new deal came out, many brokerages are bullish on CEAT Ltd’s share and have raised the target price. A brokerage firm has announced an estimate of Rs 3,450 per share, with a buy rating for the stock.
The brokerage claims that this move is in line with CEAT’s emphasis on high-margin segments. At the same time, the company cautioned that integration could prove complicated and may add pressure to the balance sheet.
Brokerage has given a target price of Rs 4,000 per share while reiterating a ‘buy’ call on the stock. The brokerage sees the new acquisition as a good strategic move and expects it to be accretive to EPS.
Another brokerage has also rated the company with the stock a “buy” rating with a price target of 3,750 rupees per share. Given the strong growth potential, CEAT remains Investec’s preferred choice in the tire sector.
Another brokerage firm views the acquisition as a strategic move to increase CEAT’s involvement within the off-highway tires (OHT) marketplace. This acquisition will be expected to broaden CEAT’s product offerings as well as provide access to a worldwide customer base.
The firm estimates that the acquisition will be accretive to EPS. The brokerage has maintained the ‘buy’ rating, with a target price of 3,500 rupees to share.
Quick Fact
| Company name | CEAT |
|---|---|
| Share jump | 13% on December 9 (5 days) |
| Stock price | ₹3,329 |
| 52-week high | ₹3,578.80 |
| New deal | Purchasing Camso brand |
| Acquisition cost | ~$225 million (all-cash deal) |
| Revenue (2023) | ~$213 million |
| Facilities | 2 in Sri Lanka |
| Camso ownership | Global with 3-year licensing |
| Promoter stake | 47.21% (September 2024) |
| Market cap | ₹13,790 crore |
| Share increase | 45.59% in a year |
| Weekly share rise | 11% |
| Target price (brokerage) | Possible ₹3,450 |
| Target price (IIFL) | Possible ₹4,000 |
| Target price (Investec) | Possible ₹3,750 |
| Strategic benefits | Expanding OHT market presence |
| EPS impact | Expected accretive |
| Caution | Complex integration & balance sheet pressure |
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