Tyre stocks on the expressway

The price of natural rubber continues to remain low and this is showing on the stock price of the tyre companies, which are all in the green for the past few days and today too, tyre stocks are on the expressway.

Apollo Tyres hit a new high at Rs.220, Ceat is up over 3% at Rs.1076, JK Tyre is up over 2%, and so are MRF and Goodyear. On the other hand, Balkrishna Industries is down in the red – maybe profit booking as it was up over the past couple of days.

A consistently falling price of natural rubber, higher production and weak global demand, all are expected to keep the rubber prices low and thus margins for tyre companies could continue to see an improvement. Brokerage houses are maintaining a buy on tyre stocks, especially Apollo Tyres which is high on most fund buying radar.