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Ceat hikes tyre prices by 2–2.5%
Ceat has raised the prices of its products by 2–2.5% across categories last week to offset
the impact of rubber prices, which have increased by 10.3% till date in CY2011 and
30.4% since June 2010. The recent price hike comes on the back of price hikes in May
2011 by an average 3–4%. While rubber prices have cooled off from their highest levels
and have currently stabilised at ~`210/kg levels, major tyre producers have hiked prices
in the last one month as they earlier resisted from passing on the entire cost increases to
consumers. The recent increases in tyre prices will help Ceat protect its margins going
forward. We maintain our Buy rating on the stock with a target price of `135. At `109,
Ceat is trading at attractive valuations of 3.6x and 0.5x FY2013E P/E and P/B, respectively.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Ceat hikes tyre prices by 2–2.5%
Ceat has raised the prices of its products by 2–2.5% across categories last week to offset
the impact of rubber prices, which have increased by 10.3% till date in CY2011 and
30.4% since June 2010. The recent price hike comes on the back of price hikes in May
2011 by an average 3–4%. While rubber prices have cooled off from their highest levels
and have currently stabilised at ~`210/kg levels, major tyre producers have hiked prices
in the last one month as they earlier resisted from passing on the entire cost increases to
consumers. The recent increases in tyre prices will help Ceat protect its margins going
forward. We maintain our Buy rating on the stock with a target price of `135. At `109,
Ceat is trading at attractive valuations of 3.6x and 0.5x FY2013E P/E and P/B, respectively.
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