Tyre Up for Road Grip

Index : 1,586 | 1Yr : -21.65% | 1Mo : +6.73%

Category : Sectoral Trackers

Min Investment : 4,284

Sharpe Volatility Trend

As a phenomenon of the booming automobile sector in India, the tyre industry is an automatic beneficiary. The growth of the industry directly depends on auto sales. Indian tyre companies which are represented by the Automotive Tyre Manufacturers Association (ATMA), has been lobbying with the government to change the inverted duty structure and take anti-dumping measures against the cheap chinese tyre imports which have affected the rubber farmers and tyre manufacturing companies to a large extent.

The fortunes of these companies are also largely dependant on the price of raw materials which accounts for around 70 percent of production cost of which rubber accounts for approximately 40 percent. An important point to note is that more than 60 percent of total rubber production is consumed by the tyre industry. It is a highly consolidated B2B market in which the established players are most likely to compete with each other for market share and gain a more dominant position in the market. Invest in the most promising tyre manufacturing companies and benefit from this consolidating market structure.

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