Shares of tyre makers rallied up to 7 per cent on the BSE in Thursday’s intra-day trade, in an otherwise subdued market, amid rising expectation of margins improvement on the back of falling raw material prices and steady product pricing.
TVS Srichakra, JK Tyre & Industries, Apollo Tyres, Balkrishna Industries, MRF and Ceat gained in the range of 3 per cent to 7 per cent on the BSE. In comparison, the S&P BSE Sensex was down 0.15 per cent at 60,568 at 10:53 AM.
Among individual stocks, Balkrishna Industries rallied 5 per cent to Rs 2,222. The company recently announced that the expansion project of 55,000 MTPA carbon black project & power plant was completed on December 31, 2022.
Meanwhile, Apollo Tyres hit a new high of Rs 335.90, surging 5 per cent on the BSE in intra-day trade today. In the past six months, the stock has zoomed 80 per cent after reporting a robust earnings growth. Management commentary on the demand outlook was healthy amid strong passenger vehicle (PV) demand and ongoing commercial vehicle (CV) cyclical upswing.
“In terms of demand outlook, we are cautiously optimistic. Correction in input prices should help in improving operating margin performance in near to medium term,” Apollo Tyres said in investor presentation Q2FY23.
With continued spends on infrastructure, improved fleet utilisation and profitability, a strong order book aided by a slew of new launches planned in Auto Expo 2023, ICICI Securities expect the PV & CV space, in particular, to witness healthy sales volumes, going forward. The premiumisation trend in the 2-W category is anticipated to continue in the near term, the brokerage firm said.
Meanwhile, appellate tribunal NCLAT has directed the Competition Commission to pass a fresh order in the matter of alleged cartelisation by tyre companies, citing the need to re-examine arithmetical and inadvertent errors as well as to review the penalty to save the domestic tyre industry, the news agency PTI reported on December 2. CLICK HERE FOR FULL REPORT
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