CEAT, JK Tyre shares hit 52-week highs, zoom up to 19%; other tyre stocks climb too; here's why

Shares of CEAT rose sharply to touch their one-year high levels in Thursday's trade. The stock jumped 19.40 per cent to hit a 52-week high of Rs 2,498.10 over its previous close of Rs 2,092.30. Turnover on the counter came at Rs 31.15 crore, commanding a market capitalisation (m-cap) of Rs 9,882.77 crore. The scrip has gained 28.48 per cent in the past one month and 49.45 per cent on a year-to-date (YTD) basis.

Today's jump can be related to the new automobile launches in the premium segment, a person, familiar with the development, said. "Tyre stocks rose today. CEAT got the maximum push as the counter touched its 52-week high. JK Tyre shares also hit one-year high. This could be related to the recent vehicle launches in the premium segment. The jump is more likely a positive rub-off effect on the tyre stocks," an industry source, requesting anonymity, said.

On the technical front, CEAT largely looked 'bullish'. Near-term target price could be Rs 2,600, an analyst said.

Ravi Singh, Vice-President and Head of Research at Share India, said, "CEAT is planning to increase exports in FY24-25. The stock is currently trading 73x its EPS that puts valuation on higher side. It is bullish and trading above 50 & 200-DMA with RSI of 70. The stock may touch Rs 2,600 levels in the near term."

AR Ramachandran from Tips2trades said, "CEAT is bullish but also overbought on the daily charts with next resistance at Rs 2,640. Investors should book profits at current levels or hold till daily support of Rs 2,168 is broken on a closing basis."

JK Tyre shares jumped 8.49 per cent to scale their 52-week high of Rs 261.40. Around 4.63 lakh shares of tyremaker changed hands today on BSE, which was higher than the two-week average volume of 3.43 lakh shares.

The counter's 14-day relative strength index (RSI) came at 87.29. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-earnings (P/E) ratio of 32.28. It has a price-to-book (P/B) value of 2.05.

The scrip has a one-year beta of 0.45, indicating low volatility.

In addition, other tyre stocks such as MRF and Apollo Tyres climbed up to 3 per cent today.

Meanwhile, Indian equity benchmarks traded higher to hit fresh all-time levels today. The domestic indices were pulled up by gains in healthcare, realty, energy and automobile shares.

Also read: Infosys shares: Can Q1 results give worst Nifty stock performer some relief? 

Also read: BSE share buyback gets board's nod; offer price for Rs 375 crore issue set at Rs 816 per share