About The Tyre Sector
The Indian tyre industry boasts a substantial valuation exceeding USD 9 billion, comprising a diverse landscape with over 40 tyre companies and 60 manufacturing plants. Renowned for producing the widest array of tyres globally, this sector plays a pivotal role in the nation's economic fabric. Directly employing 2 million individuals, it also indirectly supports an additional 1 million jobs through a network of dealers, retreaters, and related activities.
India's tyre industry is globally competitive, exporting tyres worldwide. Rural areas see a surge in demand due to limited public transport, pushing people towards vehicle ownership.
Tyres, circular parts filled with compressed air and fitted on rims, play crucial roles in supporting vehicle load, providing traction, absorbing impact, and enhancing comfort. The market offers a variety of tyre types (radial, bias), sizes (small to large), and price segments (low, medium, high), showcasing its adaptability to diverse consumer needs. The industry's vitality lies in its ability to cater to the evolving demands of domestic and international markets.
Future Outlook of the Tyre Sector
Between 2023 and 2029, the Indian tyre market is projected to grow steadily at a CAGR of 5.54%, reaching 256.24 million units by 2029. The surge is fueled by an increasing demand for radial tyres, driven by superior performance and fuel efficiency. The growing number of vehicles on Indian roads and government initiatives promoting road safety are key factors.
Additionally, there's a rising preference for tubeless tyres and a noticeable shift towards eco-friendly options. Online tyre sales are also on the rise, thanks to e-commerce platforms, reflecting changing consumer preferences in the Indian tyre market.
Things To Consider Before Investing in the Tyre Sector
Before investing in the tyre sector, it's essential to consider several factors to make informed decisions:
- Market Trends and Demand: Analyze current market trends and the demand for tyres. Keep an eye on the growth rate of the automobile industry, as it directly influences tyre demand.
- Competitive Landscape: Understand the competitive landscape by researching major players, their market share, and their strategies. Assess how the company you're considering investing in stands out in this competitive market.
- Global Presence and Export Activities: Evaluate the company's global presence and its involvement in export activities. A robust international presence can indicate a more resilient and diversified business.
- Technological Advancements: Stay updated on technological advancements in the tyre industry. Companies investing in research and development for innovative tyre technologies may have a competitive edge.
- Raw Material Costs: Tyre production heavily depends on raw materials like rubber. Monitor the fluctuations in raw material costs and the company's ability to manage and mitigate such cost variations.
- Regulatory Environment: Understand the regulatory environment governing the tyre industry. Changes in regulations can impact production processes, costs, and overall business operations.
- Financial Performance: Scrutinise the financial health of the company. Evaluate its revenue growth, profitability, and debt levels. A financially stable company is better equipped to weather economic downturns.
- Environmental and Sustainability Initiatives: With increasing emphasis on sustainability, assess the company's environmental initiatives and adherence to eco-friendly practices. This can enhance the company's reputation and appeal to environmentally conscious consumers.
How To Invest in the Tyre Sector Stocks?
To invest in sector stocks via Angel One, follow these steps:
- Log in to your Angel One account.
- Click on the search icon and look for your desired Tyre sector stock.
- Now, place your buy order. Simply click on the ‘Buy’ button, enter your desired quantity, and select the order type.
- To complete your transaction, click on the ‘Buy’ button.
You can track the status of the purchase from the ‘Positions’ section in the ‘Orders’ module. Once the stock is delivered, you can track its gains and losses from your ‘Portfolio.’
