Price hikes lag behind peers
Anand Rathi Share and Stock Brokers noted that while MRF has undertaken single-digit price hikes in the replacement market to cushion the blow, these increases still lag behind those of its listed peers. The brokerage warned of an 8-10% rise in MRF’s raw-material basket in Q2FY27. Ceat and Apollo Tyres saw revenue rise 18% and 16%, respectively, in Q1FY27. However, sequentially gross margin contracted by 620 bps for Ceat and 550 bps for Apollo Tyres. Earnings prospects of the tyre industry are sensitive to changes in input costs, making margin trends crucial. However, a company’s ability to raise prices depends heavily on demand and competitive pressures, which could test the sector’s profitability.
