Page 4 - Tyre Makers

Benign input cost likely to lift profit margins of domestic tyremakers

Manufacturers focus on replacement market as fresh demand slows

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

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 ratings agency ICRA, expects domestic NR prices to increase by five to 10 per cent over the next two quarters, to Rs 135-145 a kg. NR is a little over a third of tyre makers' input costs.The impact on companies' margins depends on factors such as scale, product mix, geographical mix and price of crude oil derivatives. Srikumar says a 10 per cent rise in NR prices (other things remaining the same) could result in a 300 basis points (bps) ...

Tyremakers to invest Rs 35,000 crore in 5 years

After reaching around 80 per cent capacity utilisation tyre makers have started looking at investing over Rs 35,000 crore in greenfield and brownfield expansions.This comes on the backdrop of anticipated double digit growth from fiscal 2019 as against single digit this year, driven by domestic and exports demand.During the same time last year, capacity utilisation of tyre industry was around 65-70 per cent.It is not only growth in automobile industry is helping the industry, growth is aided by Government's policies also, says Satish Sharma, chairman, Automotive Tyre Manufacturers Association (ATMA). The Association's members accounts to around 90 per cent of tyre production.Sharma notes, for example demonetisation has curtailed Chinese imports (which was a major challenge for capacity utilisation), further GST has even more pressure on Chinese imports which dropped by over 50 per cent in Chinese dumping into India.In 2016, Chinese import was around 150,000 tyres a month which reduced .

Tyre stocks up as rubber prices fall

Tyre stocks were up by upto 8.28 per cent on Wednesday following a sharp decline in the prices of natural rubber, the key raw material.The share price of TVS Srichakra jumped by 8.28 per cent to close at Rs 3320.5 apiece on Wednesday followed by 7.31 per cent increase in the stock of MRF. The share price of MRF closed at Rs 56854.5 apiece on Wednesday compared to Rs 52981.35 apiece the previous day.Apollo Tyres, JK Tyre Industries, Balkrishna Industries and CETA also recorded 4.58 per cent, 3.51 per cent, 3.10 per cent and 2.85 per cent jump in their stocks respectively on Wednesday.A leading industry official attributed the sharp increase in tyre stocks to falling prices of natural rubber. "The decline in the price of natural rubber would increase profit margins of tyre manufacturers assuming other expenses remain the same. Therefore, tyre stocks are in demand today," he added.Natural rubber in the benchmark Kochi market witnessed a steady decline to close on Wednesday at Rs 15025 a .

Chinese imports, economic slowdown trim trucks & bus tyre production by 20%

Economy slow down and dumping of Chinese tyre continues to impact the Indian tyre manufacturers, who have invested over Rs 35,000 crore in the recent years. The pressure is mainly on the truck and bus radial (TBR) tyre segment and the industry representatives have said that it has come to an alarming level.From a production of more than 5.5 lakh Truck & Bus radials in June last year, the production sharply declined by 20 per cent to 4.5 lakh radials in December 2016.Automotive Tyre Manufacturers Association (ATMA), representative body of 11 large tyre companies in India accounting for over 90 per cent of tyre production in the country, attributed the drop to economy slowed and dumping of Chinese radials.They noted, TBR tyres has been the fastest growing segment for tyre industry accounting for two thirds of the Rs 35000 crore investments made in recent years.Average per month import rose to 1,36,177 units in 2016-17 as compared to 1,07,181 units in 2015-16, according to ATMA. ...

Tyre makers hike prices amid note ban slowdown

Prices of car, truck tyres raised by 2-3%; those for two- and three-wheelers have been raised by 2-5%