Double digit growth expected for tyres manufacturers

Top tyres manufacturers of India expected to witness double digit growth in revenue due to improved sales to automakers and in the aftermarket segment. A report by Motilal Oswal Institutional Equities, brokerage firm, expansion in capacity and increase export demand will help in the growth after the low performance in past five years.

Analysts of the brokerage firm said, “The Indian tyre industry is expected to recover from five years of weakness and be on a linear growth path (12% CAGR over FY21-25E), supported by timely capacity expansion across companies. Improving demand, stable competitive intensity, and peak capex (capex of INR116b over FY22-24E v/s INR135.5b over FY19-21) augurs well for profitability.”

Growth in volume for two-wheelers, passenger cars and commercial vehicles are expected to be 8%, 11%, 13% CAGR over FY 21-25.However due to COVID-19, the recovery has been impacted. Between December 2020-June 2021, prices for tyres companies has increased by 8% till June 21.


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