Goodyear India soars 18% after announcing interim dividend of Rs 80/share

The record date has been set at December 15, 2020 for the dividend

Shares of Goodyear India zoomed 18 per cent to Rs 1,179 on the BSE on Tuesday after the company announced interim dividend of Rs 80/share for the financial year 2020-21 (FY21). The auto tyres & rubber products maker has fixed December 15, 2020 as record date for ascertaining shareholders for entitlement of interim dividend.

This is a positive surprise, as previous trend had averaged Rs 12-13 per share for the past several years, ICICI Securities said in a note.

With today’s rally, the stock of Goodyear India has now rallied 41 per cent in the past seven trading days, as compared to 3 per cent rise in the S&P BSE Sensex. It was trading close to its 52-week high level of Rs 1,187, touched on February 2, 2020. It hit a record high of Rs 1,299 on April 30, 2018.

For the July-September quarter (Q2FY21), Goodyear India had reported 28 per cent year-on-year (YoY) jumped in its standalone net profit at Rs 48.56 crore against Rs 37.79 crore in a year ago quarter. The company posted a net loss of Rs 4.66 crore for June quarter.

The Company manufactures automotive tyres viz. farm tyres and commercial truck tyres at its Ballabgarh plant. The Company also trades in “Goodyear” passenger car tyres (Radial) for Consumer business which are manufactured by Goodyear South Asia Tyres Private Limited (‘GSATPL’), Aurangabad. Other products which the Company markets and sells include tubes and flaps.

After a turbulent year in the tractor industry, the company is again seeing short to mid-term headwinds in demand for financial year 2020- 21 (FY21) and industry is expected to be de-grow by 8-10 per cent in 2020-21. The passenger tyre industry is expected to continue witnessing headwinds in 2020 due to the Covid-19 pandemic. However, the long term outlook is expected to be positive based on the demographic profile supported by robust GDP growth. The growing vehicle car parc is also expected to drive replacement demand in the future, Goodyear India said in FY20 annual report.

At 10:20 am, the stock was trading 13 per cent higher at Rs 1,130 on the BSE, against 0.60 per cent rise in the S&P BSE Sensex. The trading volumes on the counter jumped over three-fold with a combined 275,000 equity shares changing hands on the NSE and BSE, so far.