Multiple cost headwinds for tyre makers; week rupee may wash profitability

Operating profit margins for the sector could fall by 100 basis points this year; Apollo top pick of most analysts

Apollo strives to build brands

Tyre stocks are down by five to 11 per cent over the past month on input cost worries. Natural rubber (NR) prices in India have moved up by eight per cent over the past four months, on supply issues, including the impact from floods in Kerala. The price in rupee terms of imported rubber has risen by four per cent in the same period, due to the rupee's sharp depreciation. About 40 per cent of the sector's requirement is from import; with the home supply disruption, analysts expect this to move to 50 per cent for 2018-19. K Srikumar, vice-president at rating agency ICRA, ...