Tyre companies are on a price-raising spree to curb further compression in margins.
Tyre stocks are in the limelight. Shares of Apollo Tyres Ltd and Ceat Ltd rose to 52-week highs this week on the NSE on the back of relief provided by easing prices of raw material, including natural rubber, carbon black, and other crude-based derivatives. Prices of natural and synthetic rubber have also come off their recent peaks, while Brent crude oil prices have declined. These components form a substantial portion of the sector’s overall input costs. Given this, softening costs could give the muted operating performance of tyre makers the much-needed fillip.