Tyres stocks were trading in the green on Wednesday, October 11, after crude oil prices eased up slightly after a nearly $4 per barrel spike on Monday following the Hamas attack on Israel.
Shares of
JK Tyre and Industries Ltd surged as much as 7.6% on Wednesday on BSE to Rs 290.75 apiece amid high trading volumes. The stock had fallen 5.5% on Monday after the Israel-Hamas war erupted but has now erased all those losses.
The stock also rallied in reaction to a ‘buy’ call initiated by domestic brokerage firm Emkay Global on Wednesday. Emkay gave target price of Rs 415 on JK Tyre, hinting at a 55% potential upside over its Monday’s closing level of Rs 266.80.
The brokerage house also said that JK Tyre’s stock price can potentially double over the next three years.
Among other
tyre stocks, shares of Ceat Ltd gained as much as 3% on Wednesday to hit an intra-day high of Rs 2,148.85 on BSE. MRF Ltd rose 0.8% to Rs 1,08,099 apiece, while Apollo Tyres shares were up 0.5% to Rs 377.45.
Crude oil prices fell in Tuesday’s session on easing concerns over supply disruption due to geopolitical tensions. Brent crude settled down 50 cents, or 0.57%, at $87.65 per barrel, while US West Texas Intermediate (WTI) crude fell 41 cents to $85.97 per barrel. To recall, both Brent crude and WTI had jumped over $3.5 on Monday.
In September, CNBC-TV18 reported that the tyre manufacturing industry has witnessed a decline in stock values ranging 2-8% during the month. The downturn was primarily attributed to the upward trajectory of commodity prices and a reduction in demand from original equipment manufacturers (OEMs).
Kotak Equities had adopted a cautious stance towards tyre manufacturers, expressing the belief that maintaining price increases without adversely affecting demand might pose a challenge.
