Price hikes may partially cushion tyre firms' margins

Shares rally for 2nd consecutive day

- DEEPAK KORGAONKAR

Shares of tyre companies rallied for a second consecutive day on Tuesday, with most of the big players registering cumulative gains of up to 6 per cent over the past two days.

Apollo Tyres clocked 6 per cent gains followed by JK Tyre at 4.7 per cent and Ceat at 3.8 per cent. MRF made cumulative gains of 2.7 per cent. MRF has reportedly increased rates of its truck tyres by 2 per cent, while prices of passenger car and radial tyres were increased by 3-7 per cent. There was no hike in the prices of two-wheelers as of yet, according to a CNBC TV18 report.

Last month, media reports stated that domestic tyre companies undertook a price hike of 1-2.5 per cent with effect from July 1, in response to rise in key raw material prices (primarily natural rubber).

The price rise comes as a relief for the domestic tyre industry amidst unprecedented rise in natural rubber prices at around 200 per kg (11-year-high), ICICI Securities had said in a note.