Tyre stocks in focus: Ceat up 8% post Q2; should you buy, hold or sell?

JK Tyre & Industries, TVS Srichakra, Apollo Tyres and Balkrishna Industries were up in the range of 3 per cent to 8 per cent on the BSE in Monday's intra-day trade.

Shares price of tyre companies today

 

Shares of tyre makers soared up to 8 per cent on the BSE in Monday’s intra-day trade after Ceat reported a strong set of earnings for the quarter ended September 2025 (Q2FY25). Further, the reduction in goods and service tax (GST) rates on tyres and vehicles, which the management hopes will have a positive impact on demand across domestic categories.

 

Among individual stocks, Ceat has rallied 8 per cent to ₹4,023.85 on the back of a six-fold jump in average trading volumes. The stock price of RPG Group company was quoting close to its 52-week high of ₹4,048.95 touched on July 15, 2025.

 

Shares price of JK Tyre & Industries also soared 8 per cent to ₹419.70, followed by TVS Srichakra (5 per cent at ₹4,200), Apollo Tyres (4.5 per cent at ₹511.55), Balkrishna Industries (3 per cent at ₹2,325) and MRF (1 per cent at ₹158,349.90).

 

Ceat posts strong Q2 results

 

Ceat reported a strong Q2FY26 with an EBITDA margin at 13.3 per cent, beating analyst’s estimates. The 240 bps QoQ margin expansion was primarily driven by improved realisations and softer raw material costs (down 410 bps QoQ as a percentage of net sales). Robust momentum in the original equipment manufacturer (OEM) and replacement equipment (RE) segments, along with rising premiumisation, continued to support volume growth. 

 

Management remains optimistic about sustaining double-digit growth in the domestic market, aided by favourable GST rates, positive rural sentiment, and rising premiumisation. Internationally, while the US tariffs persist, Ceat’s limited exposure to the market has kept the impact minimal. 

 

Currently, around 50 per cent of the tariff burden is passed on to customers, with full pass-through expected over the next 2-4 quarters. The EU remains Ceat’s fastest-growing and most profitable export market, particularly in PC and TBR segments, which together contribute 65 per cent of exports. Overall margins are expected to remain healthy, supported by stable raw material prices, volume growth across markets, and disciplined cost control, analysts at JM Financial Institutional Securities said in the result update. The brokerage firm changed its rating from BUY in its previous rating system to ADD in the new rating system, with a March 2027 target price of ₹4,050 (18x FY27E EPS).

 

The GST rate cut is expected to boost tyre demand in the replacement and OEM segments. Further, benign input costs would help maintain margins for the core business. While the recent Camso acquisition is expected to take time to be earnings accretive, we remain positive on the long-term benefits that this acquisition can deliver for the group. Hence, Motilal Oswal Financial Services reiterated BUY rating on Ceat with a target price of ₹4,523 (based on ~20x Sep’27E EPS).

 

Going forward, growth is expected from higher government infrastructure spending and increased vehicle penetration due to last-mile connectivity emanating from improved economic outlook. JK Tyre’s focus on increasing share in the PCR tyre market and strong demand experienced in the PCR segment is also reflected in sales mix, with PCR segment experiencing significant increase in sales mix. The contribution of premium tyres increased from 12 per cent in FY19 to 25 per cent in FY25 and is expected to improve to 35 per cent plus in the next three years, CARE Ratings said in its rationale.