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Shares of tyre manufacturers have rallied by up to 7% on the bourses in an otherwise subdued market on robust financial performance posted during the recently concluded quarter and expectations of higher demand going forward.
Ceat (up 7% at Rs 989), MRF (up 5% at Rs 44,550), Goodyear India (up 4% at Rs 647), Apollo Tyres (2.3% at Rs 212), JK Tyre & Industries (1.4% at Rs 122) and Balkrishna Industries (1.4% at Rs 697) were trading higher by 1%-7% on the Bombay Stock Exchange (BSE). The S&P BSE Sensex was down 0.40% or 112 points at 28,075 at 02:19 PM.
The Reserve Bank of India (RBI) in its monetary policy review on August 4, said, "Car sales for July were strong. Nominal bank credit growth is lower than previous years, but adjusted for lower inflation as well as for lower borrowing by oil marketing companies and increased borrowing from commercial paper markets, credit availability seems to be adequate for most sectors.”
The pick-up in heavy commercial vehicle sales and rising port and domestic air freight in Q1 suggest strengthening transportation activity, the central bank said in a statement.
Among individual stocks, MRF has surged 5% to Rs 44,550, also its record high on the BSE. Since July 24, the stock has rallied 16% from Rs 38,527 after the company reported a 94% year-on-year (YoY) surge in standalone net profit at Rs 447 crore for the quarter ended June 30, 2015.
Ceat too surged 7% to Rs 992, extending its 23% rally in the past nine trading sessions after the company said its consolidated net profit more than doubled at Rs 121 crore in June quarter against Rs 52 crore in the corresponding quarter of previous year. The operating profit margin rose to 15.4% from 9.3%.
Anand Rathi Share and Stock Brokers expect domestic tyre demand through 2015-17 to grow 13-15%, driven by strong replacement growth and OEM demand. Analysts at the broking house expect medium & heavy-commercial-vehicles (M&H CVs), two-wheelers and passenger vehicles to support the growth, while they see negative to flattish growth from tractors and light-commercial-vehicle (LCVs).
Ceat (up 7% at Rs 989), MRF (up 5% at Rs 44,550), Goodyear India (up 4% at Rs 647), Apollo Tyres (2.3% at Rs 212), JK Tyre & Industries (1.4% at Rs 122) and Balkrishna Industries (1.4% at Rs 697) were trading higher by 1%-7% on the Bombay Stock Exchange (BSE). The S&P BSE Sensex was down 0.40% or 112 points at 28,075 at 02:19 PM.
The Reserve Bank of India (RBI) in its monetary policy review on August 4, said, "Car sales for July were strong. Nominal bank credit growth is lower than previous years, but adjusted for lower inflation as well as for lower borrowing by oil marketing companies and increased borrowing from commercial paper markets, credit availability seems to be adequate for most sectors.”
The pick-up in heavy commercial vehicle sales and rising port and domestic air freight in Q1 suggest strengthening transportation activity, the central bank said in a statement.
Among individual stocks, MRF has surged 5% to Rs 44,550, also its record high on the BSE. Since July 24, the stock has rallied 16% from Rs 38,527 after the company reported a 94% year-on-year (YoY) surge in standalone net profit at Rs 447 crore for the quarter ended June 30, 2015.
Ceat too surged 7% to Rs 992, extending its 23% rally in the past nine trading sessions after the company said its consolidated net profit more than doubled at Rs 121 crore in June quarter against Rs 52 crore in the corresponding quarter of previous year. The operating profit margin rose to 15.4% from 9.3%.
Anand Rathi Share and Stock Brokers expect domestic tyre demand through 2015-17 to grow 13-15%, driven by strong replacement growth and OEM demand. Analysts at the broking house expect medium & heavy-commercial-vehicles (M&H CVs), two-wheelers and passenger vehicles to support the growth, while they see negative to flattish growth from tractors and light-commercial-vehicle (LCVs).
