Falling rubber to lift Apollo Tyres

Lower raw material costs another hedge against imports

Ram Prasad Sahu 

Tyre stocks have been major gainers over the last two sessions on falling international rubber prices as well as expectations of more price hikes by tyre companies.  Global rubber prices (Bangkok RSS3) have shed 22 per cent since February 1. In India, the prices have fallen by a similar amount to Rs 164 a kg on higher supplies from Thailand. Although most tyre companies stand to gain, analysts see more gains for Apollo Tyres. Rubber accounted for 52 per cent of Apollo’s sales. The impact of raw material costs on margin is reflected in the 239 basis ...

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Falling rubber to lift Apollo Tyres

Lower raw material costs another hedge against imports

Tyre stocks have been major gainers over the last two trading sessions on falling international rubber prices as well as expectations of more price hikes by tyre companies. Global rubber prices (Bangkok RSS3) have shed 22 per cent since the start of February. In India, prices have fallen by a similar margin to about Rs 164 a kg on the back of higher supplies from Thailand.Although most tyre companies stand to gain, analysts see more gains from Apollo Tyres.Rubber accounted for 52 per cent of Apollo's sales. The impact of raw material costs on margins can be gauged from the fact that the company lost 239 basis points year-on-year in operating profit margins to 14.6 per cent in the December 2016 quarter, when prices were ruling firm. Apollo Tyres had indicated that it would need about 6-7 per cent price hike to absorb the higher raw material costs. The company has taken a price hike of 1-2 per cent in January, and was able to increase volumes and prices as Chinese tyre imports had ... Tyre stocks have been major gainers over the last two sessions on falling international rubber prices as well as expectations of more price hikes by tyre companies.  Global rubber prices (Bangkok RSS3) have shed 22 per cent since February 1. In India, the prices have fallen by a similar amount to Rs 164 a kg on higher supplies from Thailand. Although most tyre companies stand to gain, analysts see more gains for Apollo Tyres. Rubber accounted for 52 per cent of Apollo’s sales. The impact of raw material costs on margin is reflected in the 239 basis ... image
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