Tyre cos fall on decision to buy rubber at 25% higher price

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Shares of like Apollo  ,  Ceat and   are under pressure as they have agreed to procure from the domestic market at 25 percent higher price over international price to aid the fund-staved sector in Kerala. Analyst say margin expansion for companies will be capped.

According to an agreement, worked out in an meeting with Kerala chief minister Oommen Chandy, tyre companies will from local market with 20 percent customs duty and 5 percent purchase tax, over the international price from local dealers.

The government will refund 50 percent of the purchase tax to the companies while the rest will also be disbursed as refund claim on VAT collected from the buyers.

The scheme is effective till March 31, 2015. Decline in has been a grave concern for the state and a further fall to 115 per kg led to a crisis call.  In 2009, rubber price was at 245 a kg.

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Company Last price % change
Apollo Tyres 220.6 -0.83
Ceat 858.15 -2.87
Dunlop 19.15 -4.49
Falcon Tyres 21.9 -2.67
630.5 0.07
Govind Rubber 28.3 -1.39
JK Tyre & Ind 145.75 -4.74
Modi Rubber 20.9 -5
37560 -0.85
PTL Enterprises 37.8 -1.31
TVS Srichakra 1616.25 -2.55

– moneycontrol.com

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