Steep Fall In Raw Material Prices, Controlled Capex Could Benefit Tyre Makers Like CEAT, MRF, Says Motilal Oswal
Steep Fall In Raw Material Prices, Controlled Capex Could Benefit Tyre Makers Like CEAT, MRF, Says Motilal Oswal After witnessing hyperinflation in key input costs over the last 15-18 months, the tyre industry is currently seeing moderation in natural rubber as well as crude prices which augurs well for a margin recovery from the second half of the current financial year, brokerage firm Motilal Oswal recently said. Key input prices have seen an incessant increase of over 50 per cent since the first half of FY21 with the average raw material basket costing Rs 180/kg, resulting in an over 10 percentage point fall in gross margin. However, natural rubber prices appear to have peaked in mid-June this year with spot prices of natural rubber now being 12.5 per cent lower than the prices in the first quarter of the current fiscal. Synthetic rubber and carbon black prices are 6-7 per cent higher over their average price of the first quarter—a reflection of the delayed impact of crude oil ...