'Domestic demand for tyres to grow 6-7%'

'Domestic demand for tyres to grow 6-7%'

'Domestic demand for tyres to grow 6-7%'

 Rating agency Icra on Monday said the domestic demand for tyres will grow 6-7% supported by a broad based revival in rural expenditure with good monsoon.

It said a good monsoon will translate into a higher demand for the rural centric two-wheeler and tractor segments, Icra said in a statement.

However, Icra said, with increasing influx of cheaper Chinese tyres and uncertain input price trends, the industry is now looking to consolidate operations and optimally utilise the recently installed capacities.

Therefore, no major new capacity addition plans have been announced by tyre majors over the past few months. That said, projects worth over Rs 80 billion are expected to be completed over the next 12 months which should help tyre makers gear up to meet the likely rise in demand, it said.

But it warned that this will not result in better bottomlines as operating margins are expected to contract by 250-300 basis points.

DH Newsletter Privacy Policy Get top news in your inbox daily
GET IT
Comments (+)