Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Axis Capital (NYSE:AXS) Limited downgraded CEAT Ltd . (NSE:CEAT) from Buy to Add while raising its price target to INR4,200.00 from INR4,100.00, according to a research note released Monday.
The rating change follows what Axis Capital described as a "strong up move in stock," with shares rising 27% over the past three months, which the firm believes "renders limited upside" potential despite positive operational outlook.
CEAT reported Q1 EBITDA of Rs 3.9 billion, which was 7% below Axis Capital’s estimate due to lower-than-expected gross margins, attributed to lower average selling prices and higher raw material costs.
The tire manufacturer posted 9% year-over-year volume growth, driven by strong performance in original equipment and replacement segments, while exports remained flat.
Axis Capital maintained its EBITDA estimates largely unchanged, noting it expects CEAT’s growth momentum to continue with margins improving sequentially as the company benefits from easing raw material costs, including the lagged benefit of lower crude oil and international natural rubber prices.
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