JK Tyre & Rivals' Shares Drop 8% Amid Profitability Concerns from Rising Crude, Rubber Prices

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Tyre Stocks Plunge 8% Amid Soaring Crude, Rubber Prices; Profitability Worries Mount

Tyre Stocks Plunge 8% Amid Soaring Crude, Rubber Prices; Profitability Worries Mount

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CNBC TV18•09-03-2026, 11:56

Tyre Stocks Plunge 8% Amid Soaring Crude, Rubber Prices; Profitability Worries Mount

•Shares of major tyre manufacturers like JK Tyre, CEAT, Apollo Tyres, MRF, and Balkrishna Industries fell 3-8%.
•Rising crude oil and natural rubber prices, exacerbated by the West Asia conflict, push raw material costs up 15-20%.
•Crude derivatives account for 45% of the tyre industry's raw material basket; rupee depreciation inflates import costs.
•CLSA estimates a 400 basis point gross margin impact by FY27 if Brent crude stays at $80 and rubber at ₹220/kg.
•Margin pressure, coupled with new capex cycles, could strain free cash flow and valuation multiples for tyre companies.

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