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Indian tyre sector may grow 7-9% in 5 years – ICRA

Auto News - Published on Thu, 03 Jan 2019

Image Source: Moneycontrol
Economic Times reported that Indian tyre industry may log 7-9 per cent growth over the next five year backed by favourable outlook for the domestic automotive industry. Rating agency Icra forecast the industry to see a capital expenditure of around INR 20,000 crore during this period. Besides, the domestic tyre industry margins, which declined by 120 bps YoY in the September quarter, are expected to improve in the second half of the current fiscal due to the falling crude prices and stable prices of the natural rubber. Icra said that "Tyre demand is estimated to grow by 7-9 per cent over the next five years (FY2019-23) supported by favourable outlook for the domestic automotive industry.”

The rating agency also said it has a stable outlook on the Indian tyre industry. It said “Amidst continued investments towards capacity additions (partly being debt funded), the liquidity position, capitalisation and coverage indicators of the industry players are expected to remain comfortable largely supported by the stable earnings and healthy cash reserves available with most of the players.”

According to an industry report, the domestic automobile industry, which is currently the fourth largest in the world, is expected to become the third largest by 2021.

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Posted By : Joykumar Irom on Thu, 03 Jan 2019
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