Ceat jumped 20% to Rs 124.60 at 13:54 IST on BSE on reports that the company will invest Rs 1,000 crore in next two to three years on expanding capacity, increasing focus on research & development, market expansion, and improving customer interface.
The stock hit a high of Rs 124.60 and a low of Rs 105.90 so far during the day. The stock had a 52-week high of Rs 244 on
The company’s current equity is Rs 34.24 crore. Face value per share is Rs 10.
The current price of Rs 124.60 discounts its Q3 December 2007 annualised EPS of Rs 22.45 by a PE multiple of 5.55.
Ceat’s net profit rose 63.2% to Rs 19.22 crore on 5.1% growth in net sales to Rs 564.11 crore in Q3 December 2007 over Q3 December 2006.
Reports said that Ceat plans to raise funds through a mix of internal accruals, borrowings and sale of land assets which it holds in Bhandup, Mumbai. Collectively the company holds 23 acres of land, after selling 7 acres for Rs 130 crore earlier this year.
The total investment includes setting up two green field facilities worth Rs 900 crore. One of the plants will be a dedicated radial truck and car facility. The other will make speciality and off-the-road tyres. The new facilities and increase in production will result in an overall hike to 15 million units a year. The company will also spend Rs 25 crore on brand building, which will involve promotion of the brand through advertising in the media.
Meanwhile, Ceat will raise tyre prices by 5% effective
Ceat, previously Ceat Tyres, the flagship of the RPG group, manufactures steel-belted radials for passenger cars. The range of tyres manufactured is marketed under the Ceat, Samraat and Secura brand names.
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