For the fourth consecutive session, the shares of Ceat Ltd and JK Tyres & Industries Ltd advanced after both the companies have got better earning than the earning that was expected. This year Apollo Tyres 30%, Goodyear India 5%, MRF Ltd 22%, Ceat advanced 40%, JK Tyres surged 75%. On January 21st there was a consolidated profit of Rs 230.46 crore for the December quarter from Rs 10.27 crore which was reported by JK Tyre & Industries mainly due to increased demand from all vehicle segments. A year ago there was a growth of revenue from ₹2,199.80 crore to ₹2,769.28 crores. An arm of JK Tyre, Cavendish Industries reported last week that there was a 30% year-on-year growth in revenue to ₹788 crores.

There was a growth of 128% to ₹157 crore in taxes, depreciation, amortization, and earnings before interest. Ceat, tire maker reported in December quarter earnings there was an increase of 152% to Rs 132 crore and revenue has also grown by 26% to Rs 2221 crore. Ebitda was at ₹328 crores, up 79%. Tire sector operating profits are confirmed to register growth this year which was commented by Crisil ratings. The mentioned growth could surpass pre-covid levels, despite the lower volume. Offsetting the impact of 4-6% volume decline can be done with the help of higher realizations and benign input prices, and can enable a 6-8% growth in operating profits for tire manufacturers in fiscal 2021. Senior Director of Crisil Ratings Ltd, Anuj Sethi commented that operating profits of tire manufacturers will have an increase when there is an improved-realizations on account of the increased share of replacement demand and exports, which commands better pricing.

Sethi also commented that in the domestic market tire makers have also increased prices after the imports were placed on a restricted list in June 2020. There is an expectation of an increase of 4-5% in average realization per tonne of tires this fiscal. The year 2021 saw the development of different industries including the tire industry. All of this indicates that the industries are recovery after the impact of the pandemic which is a good sign. The tire industry didn’t have good times in the pandemic period since no cars are running and were shut down due to lockdown but now it has started to gain control of the economy.

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