Shares of smallcap tyre maker gained about 19% to Rs 3,668 this week amid rising expectations of margins improvement and the falling raw material prices of crude oil and rubber.
Since December 2022, Brent crude oil prices have declined by about 9%.
The shares of
Srichakra rallied 3.5% to Rs 3,668 in early trade on Friday. However, the stock was trading 0.4% lower at Rs 3530, at 11.34 am. The stock has delivered a return of 111% in the last six months, and it has surged about 80% in the last year.
According to the automotive tyre manufacturers association’s (ATMA) report, the tyre industry size is currently at Rs 75,000 crore, but going ahead next 3 years it is expected to reach Rs 1 lakh crore in total turnover.
As per Trendlyne data, the highest target price for the stock goes up to Rs 2,100, which shows a downside of 41% from the current market prices. The consensus recommendation from 1 analyst for TVS Srichakra is a strong sell.
For the quarter that ended September 30, 2022, the company has reported consolidated net sales of Rs 833.5 crore, up 21.24% from last quarter’s total income of Rs 687.5 crore. The company reported a net profit after tax of Rs 38.19 crore in the September 2022 quarter.
The total expense of the company in Q2 FY23 jumped 18.95% YoY to Rs 782.74 crore. The cost of raw materials consumed stood at Rs 522.19 crore (up 23.67% YoY), and employee expenses stood at Rs 82.9 crore (up 5.38% YoY).
Net cash generated from operating activities stood at Rs 40.84 crore in six months ended September 30, 2022. TVS Srichakra, a member of the TVS group, manufactures tyres and tubes for two and three-wheelers in India. It also makes ultra-light truck tyres, agricultural tyres, industrial tyres, and Off Road (OTR) tyres for the export and domestic market.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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