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Soft rubber may stabilise tyre firms' margins

Chinese imports and consequent price cuts had cast a shadow on financials

Ram Prasad Sahu 

Stocks of tyre companies hit their 52-week highs last week on weakness in prices of natural rubber prices, a key raw material which accounts for 30 per cent of revenue for players such as Apollo Tyres. Prices of rubber, Rs 144 a kg at the start of August, have fallen 10 per cent to Rs 129 a kg. The fall has a large favourable impact on financials of tyre companies.

Barring Apollo Tyres, others witnessed a year-on-year improvement in margins. Higher other expenses dented margins of Apollo Tyres, both on year-on-year and sequential basis. After June quarter results, analysts had expected ...

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First Published: Thu, September 01 2016. 21:36 IST