Rising crude oil prices to hit tyre manufacturing firms' profit margins

Profit margins of tyre manufacturers improved during the December quarter

After a marginal recovery in the December quarter, profit margins of tyre manufacturing companies are likely to remain under pressure for the next six months due to rising prices of rubber and crude oil derivatives used for synthetic rubber and other raw materials. 

Tyre companies led by Apollo Tyres reported a 17 per cent year-on-year (y-o-y) jump in consolidated revenue to Rs 40.50 billion, supported largely by a nearly 50 per cent yoy growth in the tree-born rubber (TBR) volume due to increasing radicalisation and imposition of anti-dumping duty on Chinese tyres. 

Consolidated EBIDTA (earnings before interest, debt, tax and amortization) margins