Icra stated that domestic tyre sale volumes are expected to experience a moderate growth of 4-6 per cent in this fiscal year, following an estimated pace of 6-8 per cent in the previous financial year. The growth in the last fiscal, it was said, had been driven by factors such as elevated base and subdued growth in the commercial vehicle (CV) segment. However, Icra anticipated that domestic demand from original equipment manufacturers (OEMs) in certain consumer segments like PV (passenger vehicle) and two-wheeler, as well as for replacement, would remain healthy, supporting overall tyre volume expansion in FY25. It was further mentioned that while revenues are likely to expand by 5-7 per cent this fiscal, high natural rubber prices and increasing crude prices are likely to moderate the tyre industry's margins by 200-300 basis points (bps) in FY25. The rating agency also expressed its expectation for the replacement market, which contributes to over two-thirds of the industry volumes, to remain stable, aided by healthy demand across the segments. According to Icra, tyre export volumes, which contribute approximately 25 per cent of the industry's sales (by value), were estimated to have recorded a low single-digit growth in FY24 after contracting by around 7 per cent in FY23, owing to demand shrinkage in key markets amid inflationary pressure and higher interest rates. Nithya Debbadi, Assistant Vice President and sector head at Icra, mentioned that tyre exports were expected to remain moderate in the near term due to muted demand growth in key export destinations, namely the US and Europe. She also noted that supply chain issues arising from the Red Sea crisis had raised freight costs, resulting in increased cost of tyre, and elongated transit times. Regarding domestic factors, despite an elevated base, consumer segments were expected to record a mid-single digit growth (PV at 4-6 per cent and two-wheeler at 5-7 per cent), backed by healthy underlying demand. However, growth in the CV segment was expected to be impacted by the brief pause in infrastructure activities due to the parliamentary elections, with the model code of conduct in force because of the Parliamentary elections, and the impact of high base. Tractor demand growth, according to her, was expected to be supported by the forecast of above normal monsoons, aiding rural cash flows.