Tyre companies' stocks could see more upsides

Falling natural rubber prices and expectations of higher demand are positives for the sector

Led by MRF, tyre stocks hit their fresh 52-week highs on Friday as falling natural rubber costs, crude oil prices, pricing power given falling Chinese imports and uptick in demand are expected to boost both the revenues and bottom lines of these companies. MRF, the highest priced stock on the bourse at Rs 72,835 and also the largest by market capitalisation in the tyre space, gained 2.6 per cent and hit a new high. Besides MRF, tyre stocks such as Ceat, Balkrishna Industries, Apollo and JK Tyre Industries have hit their life-time highs over the last week. 

The key triggers are