Indian Tyre Ind to grow 6%-8% in FY14-15; CAGR 11%-12% in 2015-17, expects ICRA

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The Indian tyre industry is expected to grow by 6%-8% in the fiscal year 2014-15, driven largely by the truck and bus (T&B), passenger vehicle(PV) and scooter segments, said rating agency ICRA. The agency also expects the replacement demand is expected to see a growth on increased goods movement due revives in the country’s economy.

For 2014-15, according to ICRA, the Indian tyre industry will grow by around 8% to Rs493 billion because of around 6% domestic volume growth.

ICRA also anticipates that the tyre industry will grow at a CAGR of 11%-12% during the period of 2015-17 with revenues of Rs623 billion by 2016-17.

However, the agency added , “we anticipate heightened pressure from the dealer community on tyre Original Equipment Manufacturers (OEMs) to reduce prices in-line with the falling raw material prices. Despite which, for 2014-15, we expect the significantly softer NR prices to trickle down into margins, leading to stable and high operating margins of  around 13%-14%.

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