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In tyre companies, OEM growth for M&H CV tyres was negative. Our channel check suggests that replacement demand for truck tyres (radial) has been very strong. Most tyre OEs are running full capacity utilisation on their radial tyre capacity. At the same time, growth in the farm sub-segment (tractors) has been phenomenal. Thus, we expect capacity utilisation in “bias” tyres would be much higher.
IndiaNivesh suggests investors to pick Escorts, JK Tyres and Atul Auto stock. Image source: Reuters