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March 2, 2001 | Feedback |
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Sector Focus : TyreTyres: State of the industry (2000-01) Tyres: Tariffs, prices and landed costs
NTC: Nylon tyre cord; PBR: Polybutadiene rubber; SBR: Styrene butadiene rubber
Tyres: Budget impact Impact factors
Note Figures in brackets indicate the closing share prices, on February 27, 2001 and February 28, 2001, respectively. pos= positive neg= negative neut= neutral Source: CRIS INFACŪ A: The reduction in the customs duty on caprolactam (the main raw material for NTC fabric), from 27.5 per cent to 20 per cent is expected to be passed on to the tyre producers. This is likely to benefit the tyre producers, as NTC fabric accounts for 34 per cent of the raw material cost of tyre production. B: The decrease in the effective customs duty on SBR and PBR is expected to have a positive impact on tyre producers. The consumption of SBR and PBR is higher in non-truck tyres as compared with truck tyres. As a result, companies such as Ceat Ltd., Goodyear India and MRF Ltd. (around 50 per cent of whose product mix consists of non-truck tyres) are expected to benefit more than companies, such as Apollo Tyres and JK Industries (as truck tyres constitute more than 80 per cent of their product mix). C: The decrease in the effective customs duty on carbon black is expected to have a positive impact on tyre producers. D: The reduction of surcharge on corporate tax, from 13 per cent to 2 per cent and the expected decline in interest rates, is expected to have a positive impact on producers. Rediff-CRISIL Budget Impact Analysis
Disclaimer: CRISIL has taken due care and caution in compiling this report. Information has been obtained by CRISIL from sources which it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. CRISIL is also not responsible for any errors in transmission and especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of its web site. |