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Indian tyre industry likely to grow by 8% during FY18: ICRA

11 Jan 2018 Evaluate

Credit rating agency, ICRA in its latest report has said that Indian tyre industry revenues is likely to grow by 8% during the current financial year (FY18), on the back of favorable demand prospects along with price hikes between January-May 2017.

As per the report, the industry is expected to witness growth in volumes as well at the rate of 8% to record 1,805 lakh tyres during FY18, despite the weak volumes in Q1 and part of Q2 during GST roll-out. In the terms of tonnage, tyre demand is estimated to grow by 7% during the current financial year, on the back of increased T&B replacement demand. The rating agency also pegged growth rate of 8.5% and 7% to the unit and tonnage, respectively for the next fiscal year.

Besides, ICRA estimated that the tyre industry will grow at the rate of 10% during FY18-22 and during the same period, the industry will fund their heavy capex with the help of past three years’ significant accruals. It further noted that the industry will continue adding capacity over next five years, owing to the large cash balances, strong accrual position and favourable demand. As per report, capex investments are likely to continue with planned Rs 25,000 crore of investments spread across the next five years.

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