Shares of CEAT Ltd slipped 4.30 per cent in Tuesday's trade to hit a low of Rs 3,258. At this price, the stock has slipped 9.03 per cent from yesterday's record high of Rs 3,581.45.
Bourses BSE and NSE sought clarification from the tyre maker with reference to movement in volume. The company responded, "At this moment, there is no information in relation to the Company that is required to be intimated under Regulation 30 of the Listing Regulations. We are of the view that the increase in volume is market driven."
CEAT has entered into a definitive agreement to acquire Camso brand's off-highway construction equipment tyre and track business from Michelin for $225 million. "The transaction includes the business with revenues of $213 million in CY23, along with two manufacturing facilities and global ownership of the Camso brand, after an initial 3-year licensing period," it stated.
Brokerage view
IIFL Securities said the Michelin deal is a good strategic fit and reasonable valuations imply 7-8 per cent EPS (earnings per share) accretion in FY26. The brokerage has given a 'Buy' rating for CEAT with a target price of Rs 4,000.
Investec believes the Camso acquisition "is a step in the right direction." It has also assigned a 'Buy' rating, suggesting an upside target of Rs 3,750.
In contrast, Nomura is not very positive on the stock. The brokerage has placed a 'Neutral' rating for CEAT with a downward target price of Rs 3,051.
Technically, the scrip traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The stock's 14-day relative strength index (RSI) came at 65.12. A level below 30 is defined as oversold while a value above 70 is considered overbought.
Around 15,000 shares were last seen changing hands on BSE today. The figure was lower than the two-week average volume of Rs 20,000 shares. Turnover on the counter came at Rs 5.08 crore, commanding a market capitalisation (m-cap) of Rs 13,185.92 crore. There were 47,168 sell orders today against buy orders of 6,915 shares.
As per BSE, the company's stock has a price-to-equity (P/E) ratio of 23.68 against a price-to-book (P/B) value of 3.34. Earnings per share (EPS) stood at 143.75 with a return on equity (RoE) of 14.11. Promoters held a 47.21 per cent stake in the company as of September 2024.