Tyre companies' margins to be hit by increasing input costs as well as decreasing demand for vehicles
With the increase in the price of crude oil, the current prices have reached USD 110. The tyre companies are expected to face the brunt through the component of crude derivatives, said Zee Business' analyst, Kushal Gupta.
With the increase in the price of crude oil, the current prices have reached USD 110. The tyre companies are expected to face the brunt through the component of crude derivatives, said Zee Business' analyst, Kushal Gupta.
However, the prices of natural rubber have remained almost constant, he added.
Furthermore, the decreasing demand for passenger vehicles and two-wheelers has also impacted the tyre companies. The companies have already witnessed a rise of 5 per cent in the expenses on the basis of Q4FY22.
Whenever there is an inflation in the input cost, the companies increase their prices as well. But it's not necessary for the prices to increase at the same proportion, which leads to the margins being affected negatively, he opined.
According to Gupta, in order to maintain the replacement segment margin, they will have to increase the prices by 6 per cent to 8 per cent. If the prices of crude oil increase by 10 per cent, the companies will have to increase their prices by 2 per cent to maintain their gross margin to a neutral state.
For more details, Watch Full Video:-
टायर कंपनियों के लिए आगे की राह मुश्किल?
टायर कंपनियों के लिए क्या हैं बड़ी दिक्कत?क्यों टायर कंपनियों के लिए बढ़ सकती हैं सकती है दिक्कतें , जानिए पूरी रिसर्च कुशल से..@KushalGupta44 | @deepdbhandari pic.twitter.com/JqJ41ERELd
— Zee Business (@ZeeBusiness) March 11, 2022
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Retirement Planning: SIP+SWP combination; Rs 15,000 monthly SIP for 25 years and then Rs 1,52,000 monthly income for 30 years
Retirement Calculator: 40 years of age, Rs 50,000 monthly expenses; what should be retirement corpus and monthly investment
SBI 444-day FD vs Union Bank of India 333-day FD: Know maturity amount on Rs 4 lakh and Rs 8 lakh investments for general and senior citizens
EPF vs SIP vs PPF Calculator: Rs 12,000 monthly investment for 30 years; which can create highest retirement corpus
Home loan EMI vs Mutual Fund SIP Calculator: Rs 70 lakh home loan EMI for 20 years or SIP equal to EMI for 10 years; which can be easier route to buy home; know maths
08:09 PM IST