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Comparative Analysis of Tyre Stocks

15 February 20245 mins read by Angel One
The leaders in the Indian tyre industry are MRF, Balkrishna Industries, and Apollo Tyres. Here’s an in-depth analysis.
Comparative Analysis of Tyre Stocks
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The Indian tyre industry is a major player in the global market, and it is dominated by three big companies: MRF, Balkrishna Industries, and Apollo Tyres. These companies cater to a wide range of segments, from passenger cars and motorcycles to trucks and buses.

Let’s take a look at how these leaders are performing based on the information provided in the table.

Financial Performance

# Name CMP Rs. Market
Cap Rs.Cr. 
Debt / Eq OPM % ROE % 6month return % Days Receivable Qtr Sales (YOY G%)
1 MRF 1,47,190.1 62,408.6 0.2 17.0 4.9 34.2 39.7 9.2
2 Balkrishna Industries 2,359.6 45,614.2 0.4 22.8 13.8 -2.7 41.7 5.0
3 Apollo Tyres 518.2 32,907.8 0.4 17.4 8.8 30.4 37.0 2.7
  • MRF: The company is the clear leader in terms of market capitalization, with a whopping Rs 62,408.6 crore. It also has the lowest debt-to-equity ratio (0.2), indicating a strong financial position. However, its return on equity (ROE) is the lowest among the three companies at 4.9%.This could be due to several factors, such as higher marketing and advertising expenses or lower profit margins.
  • Balkrishna Industries: The company has the highest ROE (13.8%) among the three, indicating that it is generating the most profit per rupee of equity. It also has a healthy debt-to-equity ratio of 0.4. However, its market capitalization is significantly lower than MRF’s at Rs 45,614.2 crore.
  • Apollo Tyres: The company has a debt-to-equity ratio of 0.4, which is similar to the other two companies. Its ROE is 8.8%, which is higher than MRF’s but lower than Balkrishna Industries’. Its market capitalization is Rs 32,907.8 crore, which is lower than MRF’s and Balkrishna Industries’.

Operational Performance

  • MRF: The company has the highest operating profit margin (OPM) among the three companies at 17.0%. This indicates that it can generate more profit from its sales than its competitors. However, its days receivable of 39.7 days, which means that it takes longer to collect payments from its customers.
  • Balkrishna Industries: The company has the highest OPM at 22.8%. Its days receivable are 41.7 days, which is slightly higher than MRF’s.
  • Apollo Tyres: The company has an OPM of 17.4%. Its days receivable are 37.0 days, which is lower than the other two companies.

Performance

  • MRF: The company’s stock price has returned 34.2% in the last six months, which is the highest among the three companies. This could be due to many factors, such as strong financial performance, new product launches, or positive market sentiment.
  • Balkrishna Industries: The company’s stock price has fallen by 2.7% in the last six months.This could be due to several factors, such as concerns about the global economy, rising input costs, or increased competition.
  • Apollo Tyres: The company’s stock price has returned 30.4% in the last six months. This could be due to many factors, such as strong demand for its products in the replacement market, cost-cutting measures, or an improved product mix.

MRF leads the market with a 30% share, followed by Apollo Tyres at 18% and Balkrishna Industries at 6%. It is important to note that the information in the table is just a snapshot of the companies’ performance.

Many other factors could affect their future performance, such as the global economy, government regulations, and competition. However, the table does provide some valuable insights into the relative strengths and weaknesses of the three companies.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions. 
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