Tyre producers shares rose up to 4% on Wednesday, 8 October, on prospects of improved financial performance, driven by higher volumes throughout the automotive sector, as well as ongoing cost-cutting initiatives.

OEM wholesale volume for September 2025 increased as the festive season began and GST rates were expected to fall. Notably, exports continue to expand at a solid rate year on year for the majority of OEMs. The CV market posted strong volume prints in September 2025, with signs of recovery seen in the LCV segment.

With GST 2.0 amendments projected to significantly boost vehicle volumes in the near to medium term, margins are showing indications of recovery. Rubber and crude derivatives account for the majority of tire producers’ raw material costs. 

As a result, the domestic tyre sector has primarily seen a variable profit profile, with the industry achieving strong margins during periods of low raw material prices. The brokerage firm sees green shoots of margin recovery for domestic tyre players, which, when combined with rapid volume recovery, will significantly aid profit growth going forward.

The GST Council delivered a much-needed boost to the car sector by lowering tax rates on the majority of auto segments.  

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