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Tyre Co’s Result: RM led decline in margin continues, bottom likely in near term

ICICIdirect Research 07 Feb 2025 DISCLAIMER

JK Tyre, Apollo Tyres and MRF reported their numbers for Q3FY25

All three players reported ~300 bps QoQ decline in gross margins amidst rise in natural rubber prices.

JK Tyre and MRF tyres both reported similar EBITDA margin decline to the tune of ~300 bps QoQ and was muted in nature.

Apollo Tyres however managed to report relatively better performance led by operational efficiencies (lower other expenses) limiting the EBITDA margins decline to 100 bps for its Indian operations.

Cumulatively on YTDFY25 basis, at the industry level gross margin declined to the tune of ~550-600 bps while EBITDA margin decline at efficient players was contained at ~250-300 bps.
Encouragingly however, most of the players are hinting at bottoming out of margin decline with uptick expected from Q1FY26.

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