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

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Shares of tyre companies like Apollo  ,  Ceat and  JK Tyre 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 tyre 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 collected from the buyers.

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

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

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