Shares of tyre manufacturers have outperformed broader equity benchmarks, buoyed by multiple tailwinds. Softer raw material prices, an uptick in demand from automakers following the reduction of the goods and services tax (GST) rates, and steady replacement demand have lifted sentiment toward the sector.
Ceat Tyres, an RPG Enterprise-promoted company, would soon set up a sales and marketing division in Europe and the US by next year to increase its international footprint.
Tyre stocks have been on a tear over the past six months, with average returns exceeding 45 per cent. Except for Apollo Tyres, which has seen a slight correction in the last month and a half, limiting its gains to 16 per cent, listed peers such as MRF, CEAT Tyres (formerly Cavi Elettrici e Affini Torino), and JK Tyre & Industries have delivered returns exceeding 30 per cent during this period. Production-related constraints and sluggish demand in Europe, where sales are expected to remain flat, coupled with high valuations, have contributed to Apollo Tyres' underperformance. The tyre sector's gains can be attributed to robust growth trends driven by the replacement market, which constitutes more than two-thirds of sales.
Larger listed domestic-focused tyre companies have underperformed the benchmarks in the last three months but exporter Balkrishna Industries has bucked the trend. The company, which exports off-highway tyres, has generated 43 per cent returns in this time compared to MRF and Apollo Tyres, which are down 5-10 per cent. In addition to better-than-expected performance in the March quarter, exports and market share gains have helped Balkrishna pull ahead of peers.
The automobile and auto-ancillary sector is expected to show strong Q3FY26 results, aided by festival-led demand, rationalisation in goods and services tax (GST) rates for select categories of vehicles, easing interest rates, and improving rural sentiment.
The margins of tyre manufacturers could come under pressure given the rise in rubber prices and the moderating demand for tyres. In the past three quarters, the revenue growth for listed tyre companies has moderated from low to mid-single-digit on account of factors such as lower demand in replacement segments, weak export markets and the decline in the average selling prices to car makers (OEMs). Demand trends could remain muted in the near term, given the weak passenger vehicle replacement demand, assuming a typical replacement cycle of 3-5 years, and demand moderation in the OEM segment.
CEAT has increased prices of its products across various categories by 2 to 10 pr cent, citing increasing input costs.
Indian tyre major CEAT will commission a Rs 350-million radial tyre plant at its Sri Lankan unit in July to cater to the local market.
Amid cooling raw material prices, the crude-oil linked companies, which includes paint and tyre firms, have been on a roll over the past one year. Shares of related companies have gained up to 84 per cent, as against a 14 per cent rise in the S&P BSE Sensex. Analysts, however, believe stretched valuations in both these sectors could trigger a de-rating.
Indian tyre major CEAT will commission a Rs 350 million (Rs 3.5 crore) radial tyre plant at its Sri Lankan unit next month.
Diversified corporate house RPG Group will invest an estimated Rs 13,000 crore (Rs 130 billion) on tyre, retail and power businesses in the next couple of years.
When a Future Group official was contacted, he refused comment but industry insiders confirmed that the pull-out was on the cards because of the financial health of the company.
Ceat, the country's fourth biggest tyre producer, is charting expansion plans for the international market, with launches planned in various countries, including the US, the world's biggest tyre market.
The Renault Triber's USP remains its exceptional interior space and seven-seater capability, a combination rarely found in the 7 lakh to 10 lakh on-road price bracket in India.
Oil marketing companies (OMCs), paint manufacturers, tyre producers, and aviation stocks witnessed significant gains as Brent crude oil prices slipped below $70 per barrel. The price drop came after a double blow: The US imposed tariffs on Canada and Mexico, including energy imports, and OPEC+ - the group of major oil-producing nations including Russia - announced an output increase of 138,000 barrels per day, the first such hike since 2022.
CEAT was for all practical purposes a sick company in 2001.
The crowd support for the Mumbai Indians is intriguingly much more vocal at the Maharashtra Cricket Association stadium in Pune than it is at the Brabourne or Wankhede stadiums in Mumbai city.
Indian tyre makers are expanding their capacities in the wake of international players flooding the Indian markets.
RPG Cellucom, latest venture of the RPG Group in mobility retail plans to capture three per cent of the market share with revenues of Rs 3,500 crore (Rs 35 billion) in financial year 2008-09.
From the 30-share pack, Hindustan Unilever, Tata Motors, Axis Bank, Nestle India, Asian Paints, ITC, Reliance Industries, Mahindra & Mahindra, IndusInd Bank and State Bank of India were among the laggards. Larsen & Toubro, Tata Steel, JSW Steel, HDFC Bank, Adani Ports, Kotak Mahindra Bank, Bharti Airtel and PowerGrid were among the gainers.
Ceat, the tyre manufacturing company of the Rs 16,000-crore RPG Group, will double the capacity of the radial unit it has set up in Halol, Gujarat, with an additional investment of Rs 630 crore.
The move comes on the back of a series of next generation family members taking over the reins from current promoters. Roshni Nadar, daughter of HCL founder Shiv Nadar, took over as CEO of the company in July. Nandini Piramal, eldest child of Ajay and Swati Piramal, became executive director of Piramal Healthcare in April.
Shares of Oil marketing companies (OMCs) extended their gains for the fourth consecutive session on Thursday after crude oil prices plunged to six-month lows in the international markets, which boosted investor sentiments. Traders said the OMC stocks gained with crude oil prices hovering below $70 per barrel after OPEC-plus decision to increase output from April, a move which is expected to favour Indian refiners with added marketing margins on retail fuel.
It also asked why the data shared pertained to a period from April 2019 even though the scheme for anonymous political funding was introduced in 2017.
India's used car market, which has been growing steadily at 10-12 per cent over the last 2-3 years, is expected to reach $40 billion in FY26.
Anant Goenka, 30, son of RPG Group chairman Harsh Goenka, will take over as managing director of Ceat, where he is currently deputy managing director a post the tyre producer created two years ago.
The extraordinary spurt in two-wheeler sales over the last year and a half seems to have set tyre companies rolling. JK Tyre, like Apollo and Ceat, is entering the two and three-wheeler tyre market.
From steel tycoon Lakshmi Mittal to billionaire Sunil Bharti Mittal's Airtel, Anil Agarwal's Vedanta, ITC, Mahindra and Mahindra, and a lesser-known Future Gaming and Hotel Services were among the prominent buyers of the now-scrapped electoral bonds for making political donations.
Between 2011 and 2014, they indirectly determined the price of tyres in the market, says report
Industry insiders believe that the 32-year-old's earnings will see a quantum jump of Rs 75 crore per annum.
India captain Virat Kohli was named as the International Cricketer of the Year at the CEAT Cricket Ratings awards in Mumbai, on Monday.
Industry seeks cut in customs duty on natural rubber.
Domestic tyre demand is seen to grow by 7-9 per cent over the next five years.
When it comes to the replacement of old tyres with new ones, car owners are in a catch-22 situation, wondering about the tyre brand, price and most importantly, tyre warranty.
It is the fundamentals of companies that will drive stock performance.
Shares of MRF crossed a first time Rs 100,000 mark, hitting a record high of Rs 100,300, up 1.4 per cent on the BSE in intra-day trade. on June 13, 2023. The stock surpassed its previous high of Rs 99,879.65, touched May 8, 2023. Thus far in the current calendar year 2023 (CY23), MRF has outperformed the market by gaining 14 per cent on improved financial performance.
