Tyre demand in India to grow by 6-8% in FY24, says Icra report
- IBEF
- July 13, 2023
According to a recent report by rating agency Icra, replacement and original equipment manufacturers' (OEM) demands will cause India's tyre demand to increase by 6-8% in the financial year 2023-24 (FY24).
The tyre industry's margins are anticipated to increase by 200-300 basis points in FY24 as a result of improved product mix and stable input prices. In FY23, the industry experienced operating and net margins of roughly 4% and 11%, respectively. In FY22 and the first half of FY23, margins were impacted by high input prices and growing freight expenses, although they improved in the second half. According to Icra, margins will increase by 200-300 basis points in FY24.
In FY24, the OEM segment is anticipated to would expand by 7-9% year-over-year (YoY). Construction and infrastructure projects support the demand for commercial vehicles (CVs).
"Revenues of the domestic tyre industry saw a 19.5% growth in FY23, following a remarkable 26% expansion in FY22,” according to Ms. Nithya Debbadi, Assistant Vice President and Sector Head-Corporate Ratings at Icra.
The agency anticipated mid-single-digit growth in the replacement segment in FY24. The fiscal year is likely to see a stabilisation in volume growth after two years of pent-up demand and price hikes.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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