View on Tyre sector/ stocks: Tyre sector looks comfortably positioned going forward with auto demand looking strong Says Ashwin Patil,LKP Securities
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Below are Views on Tyre sector/ stocks By Ashwin Patil, Senior Research Analyst at LKP Securities
"Tyre sector looks comfortably positioned going forward with auto demand looking strong especially in the PV and CV segments. Replacement demand too remains robust on the back of strong demand in FY 19 considering the fact that the tyre replacement cycle on an average is about 3-3.5 years.
On the profitability front as well we believe that softening of natural rubber and crude prices shall augur well for the tyre sector. Operating leverage as well shall come into picture as capacity utilisation levels which had dropped in the last 2 years should normalise. Debt and capex levels also should be moderate in the coming years. The sector looks positive to us."
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