Good Day For Tyre Manufacturers – Surge In Tyre Firm Stocks

There has been an upsurge in the stock of major tyre manufacturers like MRF and CEAT with both rallying past 6% on the BSE on 19th September 2016. Other major tyre manufacturers such as Apollo, Goodyear India, TVS Srichakra, PTL Enterprises, JK Tyre & Industries and Balkrishna Industries were all up ranging between 2% – 4% on the BSE, while improving only by 0.13% rise in the S&P BSE Sensex. This upsurge has been due to the result of the expectation of lower natural rubber prices which could improve tyre companies profit margins as rubber accounts for around 40% of the input cost. This good growth surged more than 10% in the past one month.

As for an individual tyre manufacturer, CEAT was up by 6% as it is now on Rs.1125, which is a big gain from a low value of Rs.731, in June this year. For Apollo, the hit was of Rs.222, up 4% on the BSE, which hit a 52-week high.

The domestic rubber prices over the last two months have been corrected by approximately 11%. Increased tapping post-monsoon has led to enhanced rubber production. Due to the increased tapping in the winter season, the rubber prices are likely to remain calm. Also, the international Rubber Prices have taken a dip of 9% in the last two months mainly due to the weak demand worldwide, especially moderating demand in China and which will remain in force at the current level.

Anand Rathi Share and Stock Brokers Maintained that ‘Buy” rate of CEAT with the target price of Rs.1310 which has borne fruits for the company as it has decided to focus on the passenger-vehicle and two-wheeler sub-segments.

After successfully delivering itself in the two-wheeler and passenger-vehicle tyres segment, the CEAT tyre has ventured into latest segment of margin-accretive radial OHT tyres. The Ceat’s timely capacity additions are now being commissioned which will be fully ramped up by H1 FY18- said by the brokerage firm in a report.

Author: Ankit verma

My need for speed began at a very early age and I realised this as soon as I got my first bicycle at the age of 8. When all the other kids would break downhill I would pedal harder just to go faster and enjoy the thrill. Adding to my interest for speed, I grew engrossed in the working mechanics of two wheelers thanks to my father as he is a hydraulic mechanic and would take me along with him on his repair sessions. Eventually I became familiar with the tools and basic technical concepts of two wheelers.Super sport and sport tourers are more of my liking and the sparks to these flames were ignited the first time I experienced the maddening power of a Yamaha YZF R1. I was just 14 years old at the time and got to ride as a pillion with an older acquaintance. This one short ride influenced my every decision in terms of the bikes I want to own. As of today I’m 26 years old and a proud owner of a Yamaha Fz15 version 2.0 and a Kawasaki Ninja 650 2014 model having clocked a decent 30k Kms only while touring, waiting to clock 1000s more as riding makes me feel whole again after enduring the dismal routines of life. Read more