Rising rubber prices to squeeze Indian tyre-makers' margins, Nomura says

JK Tyre & Industries

19/03/2024 07:33

** Indian tyre-makers' margins to face pressure from spike
in rubber prices, Nomura says; remains cautious on sector
    ** Brokerage says domestic natural rubber prices jumped 23%
QoQ as of Monday; international prices surged 66%
    ** Nomura flags 200 bps impact on Q3 gross margins based on
current domestic prices 
    ** Impact will likely be seen in Q1, Q2 FY25 - brokerage
    ** "We believe companies will try to take price hikes to
pass on a part of the cost, but this might be difficult and take
some time in segments such as truck-bus, where we expect demand
to be weak in the near term," Nomura says
    ** Apollo Tyres  APLO.NS , JK Tyre  JKIN.NS , CEAT
 CEAT.NS , MRF  MRF.NS  all posted Q3 profit jump
    ** Shares of all four last down between 0.1% and 2.8%

 (Reporting by Varun Vyas in Bengaluru)
 ((varunvyas.hebbalalu@thomsonreuters.com))