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CEAT Ltd. noticed a surge in its shares on Monday following the announcement of its acquisition of Camso’s off-highway building gear tire enterprise
CEAT Share Price
CEAT Share Price: CEAT Ltd. noticed a surge in its shares on Monday following the announcement of its acquisition of Camso’s off-highway building gear tyre enterprise. The tire producer disclosed the deal by way of an alternate submitting after market hours on Friday.
As a results of the announcement, CEAT’s shares soared greater than 11.5%, reaching Rs 3449.40, a brand new 52-week excessive, and bringing the corporate’s complete market capitalization to just about Rs 14,000 crore. The inventory had closed at Rs 3,092.10 on Friday.
CEAT has entered right into a definitive settlement to amass the off-highway building gear tyre and monitor enterprise of Camso from Michelin for $225 million. This acquisition contains the enterprise, which generated $213 million in income in CY23, in addition to two manufacturing services and world possession of the Camso model after an preliminary three-year licensing interval.
Brokerage companies stay optimistic about CEAT’s prospects, with many forecasting an extra 15-16% rally. Analysts are significantly optimistic concerning the firm’s earnings per share (EPS) development, pushed by the acquisition and the expanded product portfolio.
JM Financial sees the deal as a strategic transfer to boost CEAT’s presence within the off-highway tyre (OHT) market. The acquisition is anticipated to diversify CEAT’s product choices and supply entry to a worldwide buyer base. The agency estimates the acquisition to be EPS accretive and maintains a “purchase” score with a goal value of Rs 3,500.
Investec additionally views the acquisition positively, noting that it’s going to strengthen CEAT’s OHT enterprise. The brokerage has a “purchase” score with a goal value of Rs 3,750, citing the acquisition’s strategic alignment with CEAT’s objectives.
Axis Capital maintains its “purchase” score and a goal value of Rs 3,450, suggesting an 11% upside from the inventory’s final closing value of Rs 3,086. The brokerage believes the acquisition in all fairness priced, although it cautions that integration could possibly be difficult and would possibly influence the steadiness sheet.
IIFL Securities highlights the deal’s strategic match and cheap valuation, projecting a 7-8% EPS accretion by FY26. The agency believes the acquisition may set off a re-rating of CEAT’s inventory and has set a goal value of Rs 4,000 with a “purchase” score.
In distinction, Nomura is much less bullish, projecting a extra modest 10% EPS accretion from the acquisition. It has given the inventory a “impartial” score with a goal value of Rs 3,051, citing the longer-term advantages from an expanded OHT portfolio and entry to Camso’s community.
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