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Tyre stocks up as rubber prices fall

Natural rubber in benchmark Kochi market witnesses a steady decline to close at Rs 15,025 a quintal

Dilip Kumar Jha  |  Mumbai 

tyre, tyres, rubber

Shares of companies on Wednesday gained up to 8.3 per cent following a sharp decline in prices.

The stock jumped 8.3 per cent to close at Rs 3,320.5.  Share price of closed 7.3 per cent higher at Rs 56,854.5, compared to Rs 52,981.3 on Tuesday.

Shares of Apollo Tyres, JK Industries, and CEAT gained 4.58 per cent, 3.51 per cent, 3.10 per cent and 2.85 per cent, respectively, on Wednesday.

A leading industry official attributed the increase to falling prices of  

“The decline in prices of would increase profit margins of manufacturers, assuming other expenses remain the same. Therefore, stocks are in demand today,” he added.

On Wednesday, in the benchmark Kochi market witnessed a steady decline to close at Rs 15,025 a quintal, over seven per cent decline from Rs 16,175 a quintal a month ago.

“Excess inventory/production of rubber, coupled with weak global demand, had led to a significant correction in rubber prices, leading to a sizeable margin expansion for companies. Rubber prices increased sharply to Rs 166 a kg in January, from Rs 93 a kg a year ago. This has taken a toll on manufacturers’ profitability (partly reflected in the current earnings before interest, tax, depreciation and amortisation, or Ebitda, margin trend), while this is likely to hurt operational performances going ahead as well. Rising competition is an added headwind,” said Mihir Jhaveri, an analyst with Financial Services.

Tyre stocks up as rubber prices fall

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Tyre stocks up as rubber prices fall

Natural rubber in benchmark Kochi market witnesses a steady decline to close at Rs 15,025 a quintal

Tyre stocks were up by upto 8.28 per cent on Wednesday following a sharp decline in the prices of natural rubber, the key raw material.The share price of TVS Srichakra jumped by 8.28 per cent to close at Rs 3320.5 apiece on Wednesday followed by 7.31 per cent increase in the stock of MRF. The share price of MRF closed at Rs 56854.5 apiece on Wednesday compared to Rs 52981.35 apiece the previous day.Apollo Tyres, JK Tyre Industries, Balkrishna Industries and CETA also recorded 4.58 per cent, 3.51 per cent, 3.10 per cent and 2.85 per cent jump in their stocks respectively on Wednesday.A leading industry official attributed the sharp increase in tyre stocks to falling prices of natural rubber. "The decline in the price of natural rubber would increase profit margins of tyre manufacturers assuming other expenses remain the same. Therefore, tyre stocks are in demand today," he added.Natural rubber in the benchmark Kochi market witnessed a steady decline to close on Wednesday at Rs 15025 a .
Shares of companies on Wednesday gained up to 8.3 per cent following a sharp decline in prices.

The stock jumped 8.3 per cent to close at Rs 3,320.5.  Share price of closed 7.3 per cent higher at Rs 56,854.5, compared to Rs 52,981.3 on Tuesday.

Shares of Apollo Tyres, JK Industries, and CEAT gained 4.58 per cent, 3.51 per cent, 3.10 per cent and 2.85 per cent, respectively, on Wednesday.

A leading industry official attributed the increase to falling prices of  

“The decline in prices of would increase profit margins of manufacturers, assuming other expenses remain the same. Therefore, stocks are in demand today,” he added.

On Wednesday, in the benchmark Kochi market witnessed a steady decline to close at Rs 15,025 a quintal, over seven per cent decline from Rs 16,175 a quintal a month ago.

“Excess inventory/production of rubber, coupled with weak global demand, had led to a significant correction in rubber prices, leading to a sizeable margin expansion for companies. Rubber prices increased sharply to Rs 166 a kg in January, from Rs 93 a kg a year ago. This has taken a toll on manufacturers’ profitability (partly reflected in the current earnings before interest, tax, depreciation and amortisation, or Ebitda, margin trend), while this is likely to hurt operational performances going ahead as well. Rising competition is an added headwind,” said Mihir Jhaveri, an analyst with Financial Services.

Tyre stocks up as rubber prices fall

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Business Standard
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Tyre stocks up as rubber prices fall

Natural rubber in benchmark Kochi market witnesses a steady decline to close at Rs 15,025 a quintal

Shares of companies on Wednesday gained up to 8.3 per cent following a sharp decline in prices.

The stock jumped 8.3 per cent to close at Rs 3,320.5.  Share price of closed 7.3 per cent higher at Rs 56,854.5, compared to Rs 52,981.3 on Tuesday.

Shares of Apollo Tyres, JK Industries, and CEAT gained 4.58 per cent, 3.51 per cent, 3.10 per cent and 2.85 per cent, respectively, on Wednesday.

A leading industry official attributed the increase to falling prices of  

“The decline in prices of would increase profit margins of manufacturers, assuming other expenses remain the same. Therefore, stocks are in demand today,” he added.

On Wednesday, in the benchmark Kochi market witnessed a steady decline to close at Rs 15,025 a quintal, over seven per cent decline from Rs 16,175 a quintal a month ago.

“Excess inventory/production of rubber, coupled with weak global demand, had led to a significant correction in rubber prices, leading to a sizeable margin expansion for companies. Rubber prices increased sharply to Rs 166 a kg in January, from Rs 93 a kg a year ago. This has taken a toll on manufacturers’ profitability (partly reflected in the current earnings before interest, tax, depreciation and amortisation, or Ebitda, margin trend), while this is likely to hurt operational performances going ahead as well. Rising competition is an added headwind,” said Mihir Jhaveri, an analyst with Financial Services.

Tyre stocks up as rubber prices fall

image
Business Standard
177 22