 "Tyre stocks at record high; MRF nears Rs 70,000 mark")
Shares of tyre companies are on a roll with most of the frontline companies such as MRF, Apollo Tyres, Balkrishna Industries, Ceat, JK Tyre & Industries and TVS Srichakra trading at their respective lifetime highs on BSE.
The S&P BSE Sensex hit a record high of 30,146.54 in intra-day trade on Wednesday, surpasses its previous all-time high of 30,024.74, the level it had last touched on March 4, 2015.
In past-month, most of the tyre stocks have outperformed the market by surging up 21% as compared to 3% rise in the benchmark index.
Among the individual stocks, MRF hit high Rs 69,780 in noon deal trade, is close to Rs 70,000 mark.
Post demonetisation, growth estimation of two-wheelers and small cars has been hit slightly. However, lower cost of ownership of auto vehicles triggered by series of interest rate cuts, push on manufacturing and infrastructure segment by the government combined with lower fuel prices have resulted in recovery of auto sector.
“Tyre industry stands to benefit from this turnaround in OEM demand and stable replacement demand. However, tyre manufacturers supplying to commercial vehicles, passengers vehicles and tractors segment are expected to benefit the most in the near term as the outlook for these auto segments in the Indian market is relatively more positive than TW,” rating agency CARE Ratings said in recent report.
Over the past few years, the trend in tyre production and sales for OEM market has been in line with the automobile sales for the period i.e., production of tyres has been about 1.5 times that of a vehicle produced. While the demand from replacement market has comparatively been higher. Sales are expected to grow in the range of 10-11% per annum during 2017-18. Both, domestic and export demand for tyres is expected to remain robust during this period on the back of strong growth prospects for Auto OEMs as well as the stable replacement market, added report.
The S&P BSE Sensex hit a record high of 30,146.54 in intra-day trade on Wednesday, surpasses its previous all-time high of 30,024.74, the level it had last touched on March 4, 2015.
| COMPANY | LATEST | 1-MTH BEFORE | GAIN(%) |
| JK TYRE & INDUST | 162.50 | 134.70 | 20.64 |
| APOLLO TYRES | 247.40 | 209.15 | 18.29 |
| MRF | 69334.05 | 59184.15 | 17.15 |
| CEAT | 1519.00 | 1320.20 | 15.06 |
| GOODYEAR INDIA | 920.00 | 804.60 | 14.34 |
| MODI RUBBER | 72.05 | 63.05 | 14.27 |
| KRYPTON INDS. | 15.00 | 13.15 | 14.07 |
| TVS SRICHAKRA | 4194.85 | 3794.25 | 10.56 |
| BALKRISHNA INDS | 1541.15 | 1417.15 | 8.75 |
| Sensex | 30148.80 | 29237.15 | 3.1 |
In past-month, most of the tyre stocks have outperformed the market by surging up 21% as compared to 3% rise in the benchmark index.
Among the individual stocks, MRF hit high Rs 69,780 in noon deal trade, is close to Rs 70,000 mark.
Post demonetisation, growth estimation of two-wheelers and small cars has been hit slightly. However, lower cost of ownership of auto vehicles triggered by series of interest rate cuts, push on manufacturing and infrastructure segment by the government combined with lower fuel prices have resulted in recovery of auto sector.
“Tyre industry stands to benefit from this turnaround in OEM demand and stable replacement demand. However, tyre manufacturers supplying to commercial vehicles, passengers vehicles and tractors segment are expected to benefit the most in the near term as the outlook for these auto segments in the Indian market is relatively more positive than TW,” rating agency CARE Ratings said in recent report.
Over the past few years, the trend in tyre production and sales for OEM market has been in line with the automobile sales for the period i.e., production of tyres has been about 1.5 times that of a vehicle produced. While the demand from replacement market has comparatively been higher. Sales are expected to grow in the range of 10-11% per annum during 2017-18. Both, domestic and export demand for tyres is expected to remain robust during this period on the back of strong growth prospects for Auto OEMs as well as the stable replacement market, added report.
| COMPANY | LATEST | ALL TIME HIGH | PREV HIGH | PREV DATE |
| APOLLO TYRES | 247.40 | 249.50 | 249.45 | 03-Feb-15 |
| BALKRISHNA INDS | 1541.15 | 1560.00 | 1480.00 | 23-Mar-17 |
| CEAT | 1519.25 | 1527.00 | 1489.80 | 21-Apr-17 |
| JK TYRE & INDUST | 162.60 | 164.25 | 162.95 | 19-Dec-14 |
| MRF | 69334.05 | 69780.00 | 66750.00 | 25-Apr-17 |
| TVS SRICHAKRA | 4195.00 | 4280.00 | 4247.00 | 30-Sep-16 |
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