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Better grip on future for tyre stocks: Tread on easing input cost, demand

Higher raw material prices had punctured sequential margins of major tyremakers

Apollo Tyres, two-wheelers, heavy vehicles
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Natural rubber prices have been under pressure due to concern about global recession, supply-chain issues, and weak Chinese demand for tyres

Ram Prasad Sahu Mumbai
After a mixed second quarter (Q2), there are multiple tailwinds for Indian tyre companies. Higher volumes from automotive makers (especially the original equipment manufacturer segment) and steady replacement demand are key drivers on the top-line front. The bigger trigger, however, is the easing of commodity prices on the back of falling crude oil-related inputs, as well as natural rubber prices. Together, the two account for over 60 per cent of the raw material cost as a percentage of sales.

Among listed stocks, CEAT has made the most gains over the past month, as well over three months, rising 11 per

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First Published: Nov 28 2022 | 6:10 AM IST

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