Common Parameters for Such Performance for the Sector Are –

Stable Crude Oil prices

Range bound natural rubber prices

Strong demand from the Auto manufacturers

Market Leader Performance:

For the Q1 FY19, India’s largest tyre manufacturer MRF Limited (MRF) reported lower than expected numbers.

Standalone revenue for the company was down almost 3% YoY (flat QoQ) at INR 3,855.55 Cr, lower than the consensus estimate of INR 4,069 Cr.

Standalone profit after tax (PAT) was up 145% YoY (25% down QoQ) at INR 261 Cr again missed the consensus estimate of INR 368 Cr by a wide margin.

MRF is a leader in the Indian tyre industry with nearly 28% revenue market share.

Star Performer in the Sector:

Balkrishna Industries, Apollo Tyres, Ceat, and JK Tyres are the star performer for the sector for the quarter ended 30 June 2018.

The above-listed companies have registered Revenues growth of 15% to 35% for the April to June 2018 quarter while the Profits were increased by 50% to 307% for the same period.

Tyre Sector Data –

Outlook –

The management of various companies are of the view that growth momentum will continue in days to come despite the challenges posed by the raw material cost, transporters strike in some part of the country, and the new loading norms for commercial vehicles.

Again the market of TYRE industry looks exciting on the back of a good monsoon this year, which can offer secular growth opportunities going forward.

Finblab’s Pick of the Sector –

1) Balkrishna Industries Ltd : 32.35% Returns in just 5 Months

2) Ceat Ltd : 13.85% Return in just 40 days

Also Read –

1) Finblab’s Valuepick Stock for the month of August 2018 – Meghmani Organics Ltd

Disclaimer: The contents and data presented here are just for your information & personal use only. While much effort is made to provide the information, I ( Vishal Dalwadi ) or “Fin Blab” do not guarantee the accuracy, correctness, completeness or reliability of any information or data displayed herein and shall not be held responsible.

The post Finblab Research: TYRE Sector Q1 (Apr-Jun ’18) Numbers And Analysis appeared first on Upcoming ipos: Latest news on stocks, economy & finance.

Q3 (OCT to DEC) – FY 2017-18 was a quarter as far as Indian Tyre Manufacturers and Indian Tyre Industry is concern. Click here to see Q2 Results.

For the numbers, the revenues of all most all the companies were up in the range of 7% to 23%, while 3 companies out of 5 able to register growth in profits and 2 fails to do so as compared to same period last year.

The Common Parameter/s for such Performance for the Sector is/are –

Strong demand from the domestic markets as well as OEM

Market Leader Performance:

Market leader MRF has registered 6.56% growth in Revenues and 18.19% growth in Profits as compared to the same period last year.

Star Performer in the Sector:

The star performer in the sector for the quarter ended 31st December 2017 were MRF, Balkrishna Industries, and ApolloTyres where the companies Revenues grew upto 23%, while Profits grew upto 18% as compared to same period last year.

Here is the Data –

Future Outlook –

Q3 (OCT to DEC) was a good quarter for the Indian Tyre Companies thanks to the strong demand from the domestic market. Generally Q3 has been good for the Indian Tyre Industries since it is a that period of the year where monsoon season gets over and demands is always there.

Post implementation of the anti-dumping duty in September 2017, Chinese truck bus radial tyre imports declined to the 50,000 level from a peak of 140,000-150,000. This has augured well for players as is evident from the volume growth registered by the player in the industry.

After studying the results and from the management commentary one thing clear that upcoming quarter or years are likely to be good. Almost all the companies have invested heavily in some projects or the other. Let see

• MRF: Robust revenue growth can be attributed to its exclusive dealer network strength, which transitioned well, and strong OEM sales on the back of surge in PV sales.
• Balkrishna Ind: (1) Company planning to repay entire debt on books by August 2018. (2) In order to ensure raw material security and scaling up of capacity utilization of its Tyre manufacturing capacity, Balkrishna Ind is setting up a carbon black plant with capacity of 60,000 MT per annum in Bhuj (Gujarat). The plant is expected to commence operations in FY19.
• Apollo Tyre: The company will invest 20 billion on a greenfield PCR plant in AP in phase-I.
• CEAT: The Board has approved an additional investment of INR 706 Cr towards capacity expansion of greenfield project for passenger tyres. Aggregate amount to be invested increases to INR 3,506 Cr (up till FY22).

Thing that may threaten Tyre Industry are (1) higher Raw Material prices, and (2) higher Crude Oil prices

Disclaimer: The contents and data presented here are just for your information & personal use only. While much effort is made to provide the information, I ( Vishal Dalwadi ) or “Fin Blab” do not guarantee the accuracy, correctness, completeness or reliability of any information or data displayed herein and shall not be held responsible.

The post FINBLAB RESEARCH: Tyre Sector Q3 Numbers and Analysis appeared first on Upcoming ipos: Latest news on stocks, economy & finance.