Indian tyre stocks fall back
The prices of shares in Indian tyre manufacturers have fallen back after rallying last week prior to the Easter weekend. According to local news sources, the shares of tyre companies plunged by up to 8 per cent each. The fact that one of the largest domestic tyre makers, MRF, reported a decline in net profit for the quarter ended March 2014 was said to have been the main precipitating factor.
Nevertheless, MRF was not alone in witnessing a fall in its share price. Apollo Tyres, Ceat, JK Tyre and Goodyear India were all said to be down between two and eight per cent each on the Bombay Stock Exchange (BSE). However, it much be said that these declines in the wider market are to be expected as part of normal cyclic fluctuations that follow record highs on the part of some companies (such as Apollo) and sharp increase amongst the rest.
For its part the Chennai-based tyre major MRF posted an 18.9 per cent year-on-year decline in net profit for the quarter ended March 2014, due to higher expenditure and finance costs. However, the company’s total operational income grew by 13.5 per cent to 3.2 billion rupees during the quarter, while total expenditure rose 17 per cent to 29 billion rupees year-on-year.