ICRA predicts 4-6% growth in FY25 tyre sales
ECONOMY & POLICY

ICRA predicts 4-6% growth in FY25 tyre sales

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.

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.

Next Story
Building Material

Ambuja Cements Drags JSW Cement to Court Over ‘Kawach’ Brand

Ambuja Cements, part of the Adani Group, has filed a trademark infringement case against JSW Cement in the Delhi High Court, alleging that its rival copied the ‘Kawach’ brand with its new product ‘Jal Kavach’.Justice Manmeet Pritam Singh Arora issued summons to JSW Cement and its subsidiary, JSW IP Holdings Pvt Ltd, while referring the matter to mediation. Hearings are scheduled to resume on October 15 if no settlement is reached.Ambuja, which registered the ‘Kawach’ trademark in 2019, argues that the term ‘Kavach’—meaning shield—is the distinctive feature of its branding. ..

Next Story
Technology

Bentley Systems Named Innovation Partner of the Year 2025 by Afcons

Bentley Systems, the infrastructure engineering software company, has been recognised by Afcons Infrastructure Limited as its Innovation Partner of the Year 2025 at the Innovation Partners 2025 Felicitation Ceremony in Mumbai. The award acknowledges Bentley’s contribution to Afcons’ engineering digitalisation journey through an enterprise agreement providing access to over 250 Bentley engineering software tools. This adoption has enabled Afcons to accelerate project delivery, standardise digital workflows, and strengthen innovation across its infrastructure portfolio. Among key i..

Next Story
Infrastructure Urban

SBI Sells 13.18% Stake in Yes Bank to Japan’s SMBC

State Bank of India (SBI) has completed the sale of a 13.18 per cent stake in Yes Bank to Japan’s Sumitomo Mitsui Banking Corporation (SMBC) for over Rs 8,889 crore. The divestment is part of a Rs 13,482 crore deal finalised in May with SMBC and seven private banks.Following the transaction, SBI’s shareholding in Yes Bank stands at 10.8 per cent. The deal, involving 4,134.4 million shares at Rs 21.50 each, is the largest cross-border transaction in the Indian banking sector.SBI Chairman C S Setty described the 2020 RBI-led rescue of Yes Bank as a pioneering public-private partnership, addi..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?