Tyre stocks gain traction; Balkrishna at record high

Shares of tyre companies were in focus in Wednesday's session, with most of the frontline stocks trading higher on the expectation of improvement in demand. Among individual stocks, Apollo Tyres, Balkrishna Industries, JK Tyre, MRF and Ceat were up between 2 per cent and 6 per cent on the BSE. In comparison, the Sensex ended 0.13 per cent down at 58,927 points.

The gains are also supported by declining prices of key input, rubber, which is trading around one-year low.

Balkrishna Industries hit a new high of 2,692.20, up 6.2 per cent on the BSE. The stock surpassed its previous high of ~2,558.15 touched on August 4, 2021. Over the past month, it has rallied 18 per cent, as compared to a 6.8 per cent rise in the benchmark index. In the past six months, it has zoomed 62 per cent as against around 19 per cent gain in the Sensex. The company witnessed strong demand tailwinds across geographies and segments as sales volumes clocked 68,608 mt for the (Q1FY22), which is the highest quarterly sales volume.

Last week, the company announced that it has commenced the trial production at Green Field Project located at F-20 Waluj, Aurangabad, Maharashtra with an installed capacity of 30,000 mt per annum along with a warehousing facility for raw materials and finished goods. The planned small co-generation plant has not been installed, the firm said. The diversified product portfolio, strong presence across the globe, multiple sourcing bases of raw materials, and strong balance sheet with no long-term debt make Balkrishna resilient to face any challenges, an analyst at Krchoksey Shares and Securities said in the result update.