The Apollo Tyres scrip was the biggest gainer in afternoon trades today, up by 9.56 per cent to Rs 117.5. Higher volumes accompanied the surge on the counter. Over 4.6 lakh shares changed hands on the BSE till mid noon. The stock finally closed the day at Rs 126.45, up by 15.18 per cent over its previous close of Rs 107.25. More than 13 lakh shares were traded on the BSE on Thursday.
In the last 23 sessions, between May 21, 2002 and June 19, 2002, the scrip has risen by 45 per cent per cent to Rs 126.45, from Rs 69.75.
The rally in the stock is mainly due to the surge in commercial vehicle sales in the country, analysts said. The company derives most of the demand for tyres from this segment, which contributes around 60-70 per cent to its turnover. The company has about 28 per cent share of the truck and bus tyre market.
The surge in the stock is also due to reports that the company is planning to acquire an existing tyre manufacturing unit in China. Currently, the due diligence process of the company is on, and the deal is likely to be struck in the next 3-4 months. Around $20 million is likely to be invested in the Chinese company. As much as 90 per cent of the production would be sold in the Chinese market, while the rest would be exported. Currently, Apollo Tyres exports 10-15 per cent of its local production.
