Tyre stocks: Shares of tyre companies were trading higher today as crude oil prices extended their recent decline. On Thursday, oil prices fell to their lowest levels in more than four months after Qatar said Iran and the US had made “positive progress” in indirect talks, focused on the Strait of Hormuz.
Goodyear India was the
top gainer, up 7.2 per cent at ₹811 on the National Stock Exchange (NSE) around 10 AM, followed by CEAT, which was trading 4 per cent higher at ₹3,779. Tolins Tyres shares also traded 6 per cent higher at ₹110.
JK Tyre and TVS Srichakra shares gained more than 3 per cent each to trade at ₹411 and ₹4,320, respectively. Apollo Tyres (₹441), MRF (₹1,31,370) and
Balkrishna Industries (₹2,191) were up in the range of 1 to 2 per cent.
This comes at a time when Brent crude fell 1.02 per cent to $70.84 a barrel, while US West Texas Intermediate (WTI) dropped 1.21 per cent to $67.75.
Notably, around 70 per cent of tyre production costs come from crude-linked raw materials like synthetic rubber and carbon black, which makes the industry highly sensitive to oil prices.
Negotiators for the US and Iran spent two days in Doha discussing maritime traffic in the Strait of Hormuz and unfreezing Iran’s funds. Tanker traffic through the strait has started to recover, with US Vice President JD Vance saying oil flows through the waterway had returned to pre-war levels, without citing figures.
Adding to supply at a time of falling oil prices, sources told Reuters that OPEC+ oil-producing countries will likely agree to a further hike in their output targets from August when they meet on Sunday.
“Crude oil has erased the gains recorded during the US-Iran conflict as concerns over supply disruptions have eased,” Ponmudi R, CEO of Enrich Money, said, adding that sectors with high fuel, energy, and crude-linked raw material costs are likely to benefit the most from easing oil prices.
Tyres companies, he said, could see margin improvement due to lower input and transportation costs. “The rally in tyre stocks is primarily being driven by expectations of margin expansion rather than a sudden improvement in demand.”
At the same time, the domestic demand outlook remains healthy, the analyst said, while noting that the replacement demand continues to be resilient. Also, recovery in commercial vehicle sales, improving rural sentiment, and steady passenger vehicle volumes provide additional support for the sector.
Among the listed players, Ponmudi said that he favours MRF, Apollo Tyres, and
CEAT as these companies remain well positioned due to their strong domestic franchise and improving margin profile. For investors willing to take higher risk, JK Tyre could offer higher operating leverage if the earnings recovery sustains.
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