BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
The Indian tyre industry is expected to recover from five years of weakness and be on a linear growth path (~12% compound annual growth rate over FY21-25E), supported by timely capacity expansion across companies.
Improving demand, stable competitive intensity, and peak capex (capex of Rs 116 billion over FY22-24E versus Rs 135.5 billion over FY19-21) augurs well for profitability.
We estimate two-wheeler/passenger car radial /truck and bus tyre volumes to clock 8%/11%/13% CAGR over FY21-25E.
This coupled with a reasonable pricing environment and operating leverage, will enable a recovery in profitability and capital efficiency.
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