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Tyre stocks Ceat, MRF see a bumpy session with losses of up to 5%
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Ceat was the top looser from the pack of tyre stocks, down by more than 5%. JK Tyre fell 3.36%, Balkrishna Industries was down by about a percent while MRF declined by 2%.
Shares of tyre companies like CEAT Ltd., Apollo Tyres Ltd., MRF Ltd., JK Tyres Ltd., slipped more than 5% in Tuesday’s trading session. This underperformance in tyre stocks was seen on a weak day for markets where Nifty slipped by about 130 points to trade at 22,305.80 levels.
Ceat was the top looser from the pack of tyre stocks, down by more than 5%. JK Tyre fell 3.36%, Balkrishna Industries was down by about a percent while MRF declined by 2%.
Elara Capital in a note said there are limited positive triggers for the tyre industry in the current environment, while price increases in an environment of softening demand may be monitored.
The brokerage believes the tyre sector may have reached its peak margin from raw material-related benefit. “Historically, the stock price peaks closer to an
earnings upgrade cycle, which happens closer to margin peaks; the fourth quarter may be the start of earnings downgrade cycle,” it said in a note.
Shares of JK Tyre settled 3.45% lower at ₹394.90, while those of Apollo Tyres closed 0.97% at ₹478.
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