TVS Srichakra has moved higher to its new high of Rs 4,247, up 16% on the BSE in intra-day trade, in an otherwise subdued market on back of heavy volumes.
In past one-month, the stock of two- and three -wheeler tyre manufacturer zoomed 63% from Rs 2,601 on August 30, as compared to 1.8% decline in the S&P BSE Sensex.
Most of the tyre companies stocks have outperformed the market on the back of expectations of a lower nature rubber prices that could improve the profit margin of these companies, as it accounts nearly 40% of the input cost.
Along with the softened price of the rubber, there are few more factors at play which are boosting the rubber and tyre companies such as sales of passenger vehicles like car, vans as well as utility vehicles and two-wheelers have recorded double-digit growth in first five months of the current fiscal year.
CRISIL, rating agency believes that TVS Srichakara’s will benefit from the expected steady growth in 2&3 wheelers industry & tyres aftermarket, coupled with the company’s healthy position in the 2&3 wheeler tyre industry and strong operating efficiencies.
At 10:58 am, the stock was up 12% at Rs 4,110 on the BSE, as compared to 0.05% decline in the benchmark index. The trading volumes on the counter more than doubled with a combined 107,889 shares changed hands on the BSE and NSE so far.