Other tyre companies shares were also trading higher such as Goodyear India share price surged 17 per cent, JK Tyre and Industries shares gained 10 per cent and MRF share price was up 3.24 per cent in the afternoon deals.
Apollo Tyres share price rose as much as 9 per cent to Rs 95.90 apiece on BSE in Thursday’s volatile trade ahead of the company’s board meeting on April 17, 2020. The company informed the bourses that it is considering the issue of the non‐convertible debentures (NCDs) through private placement. As the coronavirus and nationwide lockdown hit the auto sector harder, research and brokerage firm Axis Capital expects tyre companies to benefit from lower raw material costs. “In the case of sub-segment tyres, the local industry is expected to benefit as cheap Chinese imports (about 25-30% of total tyre imports) are expected to drop. As per the industry experts, most OEMs were covered to continue sales and production operations till March – April 2020,” Care Ratings said in its latest research report. The report further elaborates that Indian component industry is expected to witness supply chain disruptions in the domestic market during the last quarter of the previous fiscal and first quarter of FY21 to the tune of around $8,000 – 10,000 million.
Apollo Tyres shares were trading 5.63 per cent higher at Rs 92.65 apiece on BSE in the afternoon session. Other tyre companies shares were also trading higher such as Goodyear India share price surged 17 per cent, JK Tyre and Industries shares gained 10 per cent and MRF share price was up 3.24 per cent. In a separate filing to BSE, Apollo Tyres announced the extension of its four plants shut down till April 20, 2020, to curb the spread of the novel coronavirus (COVID-19). “In view of the recent directives issued by the Central Government relating to further extension of the countrywide lockdown, the operations at our 4 plants situated in the states of Kerala (at Kalamassery & Perambra), Gujarat (at Limda) and Tamil Nadu (at Chennai) will continue to remain shut down up to April 20,2020,” said in a BSE filing.
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Research and brokerage firm Sharekhan has given a ‘buy’ rating to the stock with a target price of Rs 116, an upside of nearly 20 per cent. Care Ratings further explained that in FY20, the auto industry sales witnessed a sharp decline due to the factors such as increased insurance costs, uneven monsoon, high ownership costs, curtailed lending by the NBFC segment, weak festival demand, weak consumer sentiments and the spread of Covid-19 in the country.